AI-Powered Defense Technologies Reshaping the Space Economy: High-Growth Semiconductor and Infrastructure Stocks to Watch

The global space economy, projected to reach $1.8 trillion by 2035, according to McKinsey, is undergoing a transformative shift driven by artificial intelligence (AI) and advanced semiconductor technologies. As governments and private firms pour billions into research and development (R&D), the intersection of defense, space, and infrastructure is creating unprecedented opportunities for high-growth stocks. This analysis identifies key semiconductor and infrastructure companies positioned to capitalize on this convergence, supported by recent contract awards, R&D spending trends, and strategic partnerships.

Semiconductor Innovators: Powering AI-Driven Defense and Space Systems

The semiconductor industry is at the heart of this transformation, with demand for AI-optimized chips surging due to their critical role in defense systems, satellite operations, and space exploration. Global semiconductor sales are expected to reach $697 billion in 2025, per a Deloitte outlook, fueled by generative AI chips and data center expansions.

Palantir Technologies (PLTR) and Anduril Industries stand out as pioneers in AI-powered defense solutions. In 2025, the duo secured a $100 million contract with the U.S. Army for the Next-Generation Command and Control (NGC2) system, with Palantir receiving $30 million and potential annual recurring revenue exceeding $150 million over three years, as reported by Yahoo Finance. Anduril's Lattice OS, a smart battlefield platform, is being scaled via a $100 million Other Transaction Agreement (OTA) from the Pentagon's Chief Digital and AI Office, according to DefenseScoop. These contracts underscore their leadership in edge computing and real-time decision-making for military operations.

EdgeCortix, a Japanese fabless semiconductor firm, has also emerged as a key player. In February 2025, it became the first Japanese company to secure a contract with the U.S. Defense Innovation Unit (DIU) under its Resource Optimized Compute program, per an EdgeCortix press release. EdgeCortix's SAKURA-II AI edge accelerator is being tested for radiation resilience in space and military applications, aligning with the DoD's push for compact, energy-efficient AI hardware, as reported by Evertiq.

Rocket Lab, meanwhile, is leveraging its vertical integration capabilities to dominate the defense satellite market. The company was awarded a $515 million contract by the Space Development Agency (SDA) to design and build 18 Tranche 2 Transport Layer-Beta Data Transport Satellites, according to a Rocket Lab press release. Additionally, Rocket Lab's Neutron rocket was on-ramped to the Air Force's $5.6 billion National Security Space Launch (NSSL) program, positioning it to compete for high-priority missions, per a subsequent Rocket Lab update.

Infrastructure Firms: Building the Backbone of the AI-Powered Space Economy

Infrastructure companies are equally pivotal, providing the physical and digital frameworks enabling AI and space technologies. Firefly Aerospace, for instance, raised $868 million in an IPO in 2025, backed by government contracts for commercial space launches, according to a Medium post. Similarly, Brookfield Asset Management is pivoting toward AI infrastructure, investing in data centers and server farms to meet surging demand for computational power, according to a Voyager analysis.

Ericsson North America and Nokia Federal Solutions are advancing secure 5G and tactical networks for defense applications, including spectrum-sharing solutions and AR/VR training platforms, per ExecutiveBiz. While specific DoD contracts for Ericsson remain undisclosed, an ENR article notes this, and Ericsson's financial reports highlight its focus on expanding 5G infrastructure for government clients.

Voyager Technologies, recently public, is another standout. Its acquisition of ElectroMagnetic Systems (EMSI) and collaboration with Latent AI to enhance space-based radar systems demonstrate its commitment to AI-driven defense and space operations, according to the Space Foundation. Similarly, Blue Origin is deploying AI-enabled sensors for lunar base development, reflecting broader industry trends, as noted by GeekWire.

Geopolitical and Market Dynamics: A Race for Technological Supremacy

The U.S. and China are locked in a high-stakes competition to dominate next-generation technologies. The U.S. federal government allocated $55 billion for FY 2025 R&D, with a focus on semiconductors, AI, and space, according to NSF, while China increased its science and technology budget by 10% to $55 billion, per Tom's Hardware. These investments are accelerating innovation but also intensifying supply chain risks and talent shortages, Deloitte notes.

Public-private partnerships are emerging as a critical strategy. For example, SpaceWERX awarded $146 million in Small Business Innovation Research funds to nine space tech firms in 2025, emphasizing dual-use commercial technologies for the Air Force and Space Force, according to SpaceNews. Such collaborations reduce costs and accelerate deployment of AI-driven systems.

Investment Outlook: Strategic Opportunities and Risks

The semiconductor and infrastructure sectors offer compelling long-term opportunities, but investors must navigate risks such as geopolitical tensions, regulatory shifts, and technological obsolescence. However, companies with strong R&D pipelines, diversified contracts, and strategic partnerships-like Palantir, Anduril, EdgeCortix, and Rocket Lab-are well-positioned to outperform.

Conclusion

The fusion of AI, defense, and space technologies is redefining global economic and security landscapes. As R&D spending surges and infrastructure demands escalate, semiconductor and infrastructure firms with direct ties to DoD and space sector contracts are poised for outsized gains. Investors who align with these trends-while remaining mindful of macroeconomic headwinds-can capitalize on a transformative era in technology and national security.