Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding

07/08/2025

Three satellite stocks to purchase with NATO pledging to boost defense funding feature two American companies another from Europe.
The three satellite stocks to purchase should be aided by NATO's decision to increase spending to 5% of GDP by 2035 for all 32 member countries, with a floor of 3.5% earmarked for “core military needs.” That decision more than doubles the previous 2% target set in 2014.
The heightened defense spending could become a key growth engine for many satellite companies worldwide. NATO’s plan for increased military spending is reminiscent of President Reagan more than doubling the U.S. military budget from below $150 billion in 1980 to $300 billion-plus by 1985.
Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding: Remembering Reagan
In the Reagan administration, the U.S. government invested heavily in B-1 bombers, missiles and an expanded Navy fleet, as well as the Strategic Defense Initiative (SDI), called “Star Wars” by skeptics, intended to create a space-based missile defense system. As the 40th U.S. president, Reagan said that peace needed to be achieved through strength, and history proved him right, wrote Frank Holmes, the CEO and chief investment officer of U.S. Global Investors (NASDAQ: GROW).
The Americans outspent the Soviets and proved to be more innovative… ultimately outlasting them, Holmes continued. President Reagan’s strategy played out on the international stage recently at the NATO summit in The Hague.
NATO Secretary-General Mark Rutte recently praised U.S. President Donald Trump for pushing America’s allies to commit to a a boost in spending. The breakthrough would not have happened without Trump, Rutte said.
Trump, echoing Reagan’s “peace through strength” strategy, recently said it is vital that the additional money be spent on “very serious military hardware” … and hopefully made in America where the "best" is manufactured.
Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding: IRDM
Iridium Communications Inc. (NASDAQ: IRDM), a former recommendation of Bryan Perr in his Cash Machine investment newsletter and the Hi-Tech Trader advisory service, is also in the same low-Earth-orbit (LEO) satellite services communications business that includes Covington, Louisiana-based Globalstar, Inc. (NASDAQ: GSAT).
Bryan Perry heads the Cash Machine investment newsletter and Hi-Tech Trader.
Iridium is the only provider of satellite communication with complete global coverage, said Michelle Connell, who heads Portia Capital Management in Dallas. IRDM's LEO network allows it to provide consistent and reliable communication across areas not covered by wireless or wireline, she said, adding that mission critical communication can be offered across oceans, remote areas, war zones and geographies suffering from natural disasters.
Iridium only began paying a dividend in March 2024 and currently offers a dividend yield of 1.90%. The mobile satellite services company has been generating strong cash flow from operations dating back to 2017, Connell commented.
“With its revenue and profits growing, I would expect the IRDM to continue increasing its dividend,” Connell counseled. “I think the company (management) understands how this will increase their reputation with shareholders.”
Michelle Connell owns and is chief investment officer of Portia Capital Management.

Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding: Defense Driven
Iridium is also one of the satellite communications that caters to clients in defense, government service and commercial markets. President Trump has proposed a $1 trillion defense budget for fiscal year 2026, continued Connell, a charter financial analyst. In addition, NATO countries are being pressed to increase their defense spending, she added.
The company's customers also span well beyond governments to include travel providers such as airlines and railways, as well as commodity developers in mining, oil and gas, Connell counseled. Demand from these customers is inelastic and growing, Connell added.
In addition, Iridium currently is building out a network to provide the next generation of connectivity between people and devices, she added.
"The services will be delivered through a combination of the company's non-terrestrial network and the technology that was acquired with the Satelle acquisition in 2024," Connell said. "Satelle's technology provides high security for IRDM's customers and compliments IRDM's current technology."

Chart courtesy of www.StockCharts.com.

Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding: New Partnership
A new partnership between Iridium and Syniverse was announced on May 29 to support the rollout of Iridium NTN Direct service with mobile network operators (MNOs) worldwide. The partnership would allow Iridium NTN Direct to integrate with Syniverse’s global platform, facilitating MNOs keeping their customers continuously connected everywhere on the planet.
Iridium is putting the infrastructure in place to allow mobile network operators (MNOs) around the world to roam onto the company’s network with the authentication, billing and related functions, said an Iridium spokesman. According to GSMA’s 2025 Industry Survey, 85% of MNOs plan to pursue non-terrestrial network (NTN) service with a Low-Earth Orbit (LEO) solution that extends their coverage worldwide. As part of 3GPP Release 19, Iridium NTN Direct will provide truly global, standards-based direct-to-device (D2D) and narrow-band Internet of Things (NB-IoT) messaging and SOS for consumer devices, automobiles and industrial applications in agriculture, transportation, logistics, energy and utilities.
The combination of MNO requirements and Iridium NTN Direct capabilities gives their customers access to a fully deployed, owned and operated satellite constellation, rare global coverage, coordinated mobile satellite services (MSS) spectrum and a history of providing reliable safety of life services.
“The integration of Syniverse’s system with the Iridium network will give MNOs a simple path to expand their footprint to the entire planet,” said Matt Desch, Iridium’s CEO.
Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding: GILT
Israel-based Gilat Satellite Networks Ltd. (NASDAQ: GILT) is rated “outperform” by Chicago-based investment firm William Blair & Co.'s Louie DiPalma, an aerospace and defense analyst. DiPalma wrote that Gilat reported strong defense growth of 34% and progress with its Boeing (NYSE: BA) Sidewinder line-fit agreement, but revenue was negatively impacted by temporary renewal delays for operations in Peru.
“Profitability was also depressed due to low initial margins for Stellar Blu during its scaling phase,” DiPalma wrote in a recent research note.
Gilat is pursuing multiple large Sidewinder orders to add to its existing backlog, DiPalma wrote. On Jan. 7, Gilat successfully closed the acquisition of Stellar Blu Solutions LLC, a U.S.-based provider of next-generation satellite communications terminal solutions. The acquirer's guidance indicated that annual revenues from Stellar Blu should range between $120 and $150 million in 2025, based on a “robust backlog” from the business.
“In addition, the acquisition is expected to be accretive on non-GAAP results for 2025,” DiPalma wrote.
Furthermore, once Stellar Blu reaches its target manufacturing capacity, which Gilat projects will occur in the second half of 2025, the earnings before interest, taxes, depreciation and amortization (EBITDA) of the acquired business would have margins above 10%.
Chart courtesy of www.StockCharts.com.
“This acquisition is a pivotal step in our strategy to expand Gilat’s presence in the growing In-Flight Connectivity (IFC) market,” said Adi Sfadia, Gilat’s CEO, at the time of the purchase.
Stellar Blu is positioned to win a supplier partnership with Airbus over the next two years, DiPalma wrote. Gilat is one of the key global providers of modems, antennas and solid state power amplifiers (SSPAs) in the $3 billion satellite communications infrastructure market, he added.
“Shares of Gilat trade four times our 2025 adjusted EBITDA estimate,” DiPalma said. “We believe this valuation presents a buying opportunity given the dynamic growth potential made possible by its recent acquisitions of DataPath and Stellar Blu and the potential to further penetrate the IFC market. We see potential for both long-term organic growth acceleration and margin expansion after integration.”
Three Satellite Stocks to Purchase with NATO Pledging to Boost Defense Funding: RKLB
Rocket Lab USA Inc. (NASDAQ: RKLB) is a buy recommendation of Citigroup’s aerospace and defense analyst Jason Gursky. The company’s share price fell amid the recent market sell-off but its outlook offers hope for it to become a launch industry success story, Gursky wrote.
The challenge for launchers is to do so reliably. Rocket Lab is gaining customers but the best path to growth and profitability is to put the satellites it is entrusted to placing in orbit where they are supposed to go.
Gursky expressed optimism that Rocket Lab will succeed. Investors who like bargains may want to consider purchasing shares in Rocket Lab after its recent price reduction.

Chart courtesy of www.stockcharts.com
The three satellite stocks to purchase could rise toward the sky as alternatives that could prove profitable for investors who can afford to be patient.
Mounting Geopolitical Risk
President Trump criticized Russia's President Vladimir Putin for continuing to send his own soldiers off to die and keeps killing their counterparts from the Ukraine. Trump has attempted to help the two sides negotiate a ceasefire, but Putin has refused to do so as the death toll mounts on both sides.
The United States is halting shipments of certain weapons to Ukraine amid worries that its own stockpiles have fallen too much, Pentagon officials said Tuesday, July 1. But certain defensive weapons will continue amid intensifying attacks from Russia.
Some munitions previously were promised to Ukraine by the Biden administration. The timing is bad for Ukraine, with Russia recently launching its biggest aerial attacks since its invasion more than three years ago on February 24, 2022. The fierce bombing campaign further has dimmed the prospects that President Trump's plan to forge peace would succeed quickly upon him taking office on January 20, 2025.
The world also is less only several weeks past the United States bombing three nuclear development sights in Iran in an attempt to thwart progress in enriching uranium that could be used to deploy nuclear weapons. The Republican-led U.S. Senate rejected a Democrat-driven plan to block President Donald Trump from using further military force against Iran, hours after the June 27 remarks of the president that he would not rule out further bombing. The Senate voted 53 to 47 to defeat a war powers resolution that would have required congressional approval for more military action against Iran.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

Sincerely,
Paul Dykewicz, Editor
StockInvestor.com