Redwire Pivoted to Orbital Computing Right as Anthropic Said It Wants Gigawatts in Space. Is This $8 Stock the Cheapest Way to Play the Data Center Satellite Concept?
On Sept. 30, aerospace tech company Redwire (RDW +3.32%) announced a partnership with Sophia Space to develop infrastructure for orbital data center satellites. Just months earlier, artificial intelligence (AI) lab Anthropic had disclosed its interest in working with Space Exploration Technologies to put multiple gigawatts of computing capacity into orbit.
For Redwire, the timing couldn’t be much better. The stock, recently trading around $8 per share, offers investors exposure to a potentially enormous new market. But whether it’s actually a good bargain will depend on how quickly orbital computing becomes commercially viable.
Redwire has the technology orbital data centers need
Under its agreement with Sophia Space, Redwire will explore developing scalable computing infrastructure using Sophia’s modular TILE architecture. This technology combines computing hardware, solar power, and thermal management systems designed to operate in space. These are essential components of data center satellites, which would use freely available solar energy to power their computing systems.
Image source: Getty Images.
The companies plan to pursue government and commercial opportunities, too. This would potentially include projects involving the U.S. military.
Anthropic is thinking much bigger
In May, Anthropic announced an agreement to lease more than 300 megawatts of computing capacity at SpaceX’s Colossus 1 data center in Tennessee. It also expressed interest in partnering with SpaceX to develop multiple gigawatts of orbital AI computing capacity.
To be sure, building that much compute capacity and placing it in orbit would require enormous investments in solar arrays, spacecraft, rocket fuel, power distribution, and cooling equipment. But it’s worth noting that Redwire already manufactures several of the key technologies needed, putting it in a position to benefit if orbital computing takes off.
Redwire’s latest financial results were a mixed bag
In the third quarter, Redwire’s revenue increased 5.4% year over year to $109 million. Its backlog reached a record $619.7 million, up nearly 75%, while its gross margin improved from 16.3% to 32.3%. Management also reaffirmed its full-year revenue forecast range of $450 million to $500 million.
RDW – Redwire
$8.40+$0.27 (+3.32%)
NYSE · As of 4:00 PM ET 11/11/26
Of course, Redwire also reported a quarterly net loss of $23.2 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of negative $5.3 million. Given the company’s market capitalization of approximately $2 billion, the stock trades around 4.6 times trailing revenue. That’s hardly an obvious bargain valuation for an unprofitable company.
Is Redwire worth buying?
Orbital computing faces substantial obstacles, including launch costs, protecting delicate hardware from radiation exposure, communications bandwidth limitations, the difficulty of cooling servers efficiently in a vacuum, and an inability to easily maintain or update satellites’ hardware. Indeed, large-scale commercial deployments of cost-effective data center satellites could take years.
Redwire also faces competition from other space infrastructure suppliers, including companies that could develop their own systems. Nevertheless, it does have an advantage over companies entering the market without established aerospace operations. Redwire already supplies a variety of types of hardware used in space, has existing government and commercial customers, and possesses technologies applicable to orbital computing.
With all that in mind, the company offers speculative exposure to this emerging industry. But its low share price doesn’t automatically mean the stock is cheap.
I consider Redwire an interesting long-term space infrastructure investment rather than a proven orbital data center winner. Its upside could be substantial if the market develops, but don’t assume those future contracts are guaranteed.
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Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.