President Trump Just Cut the Budget on Boeing's and Lockheed's Most Important Space Program

Globe and Mail

17-05-2025

Eight years ago, President Donald Trump opened a new age in space when he announced mankind will return to the moon via a new NASA initiative: Project Artemis (although it didn't receive the official name until two years later).
Eight years later, Trump is back in office and... surprise! He's apparently decided to cut funding to NASA, including funding for Project Artemis.
Cut and shuffle
The White House released its budget proposal for fiscal year 2026, and one of the biggest surprises therein was a 24% cut in NASA funding, which would fall from $24.8 billion this year to $18.8 billion, next year, potentially impacting the revenue streams of many of America's biggest space companies.
To be more precise, I should say the Trump administration plans to cut some programs, and shuffle money around among others. Earth science and space divisions for example (yes, NASA has divisions that aren't "space") would see spending cuts of $1.2 billion and $2.3 billion, respectively.
As for the money that's left, $7 billion would be earmarked for lunar exploration (i.e., Project Artemis) and another $1 billion will go to sending missions to Mars. (But not, apparently, for the Mars Sample Return mission, or MSR. That program, which Rocket Lab (NASDAQ: RKLB) has been angling to win for $4 billion, is now on the chopping block.)
Goodbye SLS, we hardly liked ye
The biggest change contained in the space budget, however, is a plan to axe the Space Launch System (SLS). The SLS was designed by NASA for launching astronauts to the moon and back, along with the Orion space capsule that would carry them, and also the Lunar Gateway space station, where they would dock before descending to the moon. A White House statement described the SLS, upon which all the rest depends, as "grossly expensive and delayed," costing taxpayers "$4 billion per launch and ... 140 percent over budget."
The budget proposal calls for ending SLS launches after just two more launches, in 2026 and 2027. From that point onward, NASA would use "more cost-effective commercial systems that would support more ambitious subsequent lunar missions." Which sounds like code for SpaceX and Blue Origin rockets.
Who loses if SLS and Orion and Gateway go away -- and who wins?
The president's proposed budget is only that, of course, a proposal. Congress will ultimately decide which programs are cut and what funds allocated (or not). But with Republicans in control of Congress, and Trump in the White House, the near-term risks are clear.
Axing the SLS program threatens an $82 billion gravy train of contracts that Boeing (NYSE: BA), lead contractor on SLS; Lockheed Martin (NYSE: LMT), which builds Orion; and L3Harris (NYSE: LHX), Northrop Grumman (NYSE: NOC), and other subcontractors were anticipating over the next couple of decades, as Project Artemis rolled through an anticipated 20 total missions to the moon.
On the other hand, though, removing $4 billion in roughly annual launch costs for SLS rockets and Orion space capsules would leave more money for more budget-conscious space contractors like SpaceX and Blue Origin to step in and take over the roles currently occupied by Boeing, Lockheed, et al. SpaceX has already won a couple of contracts to use its new (and importantly, not yet certified) Starship. Not only can Starship fly to the moon, but in "Human Landing System" configuration it's also capable of landing on the moon -- all for less than $3 billion per trip. This cost includes the cost of refueling Starship in Earth orbit before departure to the moon (another technology that SpaceX is working on, but hasn't yet proven in practice).
Similarly, Blue Origin's new New Glenn rocket is supposed to be able to reach the moon and land its Blue Moon spacecraft there for less than the $4 billion launch cost of an SLS: $3.4 billion, to be precise.
What all this means for space investors
Long story short, the changes the Trump administration is proposing promise dramatic savings for taxpayers, albeit at the cost of betting on SpaceX and Blue Origin to develop and finalize new technologies (that could still fail). Assuming they succeed, though, the future could see old guard space companies like Boeing, Lockheed, Northrop, and L3 increasingly shut out of the space race, and replaced by newer rivals offering cheaper services to NASA.
This isn't necessarily great news for investors, as neither SpaceX nor Blue Origin is yet publicly traded -- while the space stocks that investors do already own could lose value as they lose contracts. For the long-term future of the space industry, though -- and for taxpayers as well -- a shift to doing space business more cheaply is probably a positive development.
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