Key Points
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SpaceX’s much-hyped initial public offering has put fresh attention on space stocks.
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Rocket Lab’s backlog, launch contracts, and defense work can prove to be solid growth catalysts.
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A potential acquisition of Iridium Communications can dramatically expand Rocket Lab’s addressable market.
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Space Exploration Technologies‘ (NASDAQ: SPCX) initial public offering has dramatically increased investor attention around space stocks. One that is definitely worth a closer look is Rocket Lab (NASDAQ: RKLB).
SpaceX is set to join the Nasdaq-100 on July 7, which could drive index-tracking funds to buy the stock. However, SpaceX’s initial index weight is estimated to be less than 1%, as the Nasdaq-100 adjusts for public float, or the percentage of shares available for public trading.
So, while SpaceX may dominate the headlines, Rocket Lab’s backlog, contracts, and execution milestones still give investors reasons to take the company seriously as a space and satellite stock.
Why Rocket Lab Still Matters
Rocket Lab is already demonstrating solid business momentum. In the first quarter, revenue jumped 63.5% year over year to $200.3 million. The company’s generally accepted accounting principles (GAAP) gross margin was 38.2%, while backlog rose 20.2% sequentially to $2.2 billion.
The company also signed 31 new contracts for Electron, its small rocket, and HASTE, its defense-focused launch vehicle used for hypersonic testing. The company also added five contracts for Neutron, its larger rocket, which is still under development. Rocket Lab had over 70 contracted launches in its backlog at the end of the first quarter.
SpaceX’s IPO has undeniably brought more attention to the space industry, but Rocket Lab’s case is not based only on market excitement. Rocket Lab expects second-quarter revenue to fall in the range of $225 million to $240 million, up 16% sequentially at the midpoint.
Rocket Lab is expanding beyond launches
Rocket Lab’s planned $8 billion acquisition of Iridium Communications (NASDAQ: IRDM) can prove to be a long-term catalyst. Iridium already operates a low-Earth-orbit satellite network and has more than 2.5 million subscribers across government, aviation, maritime, defense, and enterprise markets. If the deal closes, Rocket Lab would not only build and launch satellites but also operate them. It could also operate a satellite network and sell communication services.
In March 2026, Rocket Lab also signed a $190 million HASTE contract with Kratos Defense & Security Solutions for the U.S. Department of Defense’s MACH-TB 2.0 hypersonic testing program. The contract covers 20 hypersonic test flights over four years and is the largest launch contract in the company’s history. Hence, Rocket Lab is also building a defense-focused business rather than just competing with SpaceX on regular satellite launches.
Risks to consider
The neutron rocket is important to the company’s ambition to handle larger satellites, government missions, and larger commercial missions. However, Rocket Lab has pushed Neutron’s first launch target to the fourth quarter of 2026 after a development setback. Any further delay could hurt investor confidence.
Rocket Lab is also still unprofitable. The company reported a net loss of $45 million in the first quarter and expects an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $20 million to $26 million in the second quarter.
Customer concentration and government exposure can also pose risks. In 2025, the company’s top five customers accounted for 49% of revenue. The top five backlog customers also accounted for 77% of its backlog. Rocket Lab also earned 47% of its revenue from U.S. government-related contracts, many of which were fixed-price contracts, in 2025.
Investors should closely monitor both growth catalysts and risks before treating Rocket Lab as a simple SpaceX alternative.
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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Kratos Defense & Security Solutions and Rocket Lab. The Motley Fool has a disclosure policy.
