Space Stocks Got Crushed on SpaceX's Big Day. Is the Sell-Off a Warning or a Buying Opportunity?

It was a strange day to own a space stock. While SpaceX jumped about 19% in its first session as a public company, several of the smaller, already-public names in the sector went sharply in the other direction. As of this writing, shares of Rocket Lab (NASDAQ: RKLB), AST SpaceMobile (NASDAQ: ASTS), and Intuitive Machines (NASDAQ: LUNR) were all down meaningfully, even as the company they're so often compared to was being celebrated.

So, what happened?

One widely floated explanation is rotation. With retail demand for SpaceX shares running hot, the theory goes that some investors sold their existing space holdings to free up cash for an allocation in the debut. If that's the main driver, the drop says little about these businesses and a lot about a one-day scramble for shares.

But the move may also reflect something more durable: investors taking a harder look at how these companies stack up against a far larger, better-funded rival. Here's a closer look at the three names and whether the drop changes anything.

Image source: Getty Images.

1. Rocket Lab

Rocket Lab fell more than 10% on Friday -- a notable drop but the mildest of the three -- and one that came on a day the company actually had good news. Rocket Lab said it will join the Nasdaq-100 index later this month -- a milestone that typically brings fresh demand from index funds.

Of the trio, Rocket Lab has the most established business. It runs an active small-rocket launch service and a growing space systems segment that builds satellites and spacecraft components, and its revenue rose about 63.5% year over year in the first quarter of 2026. It is also developing a larger rocket, Neutron, aimed at heavier payloads.

But the stock's valuation is difficult to justify. Rocket Lab still isn't profitable, and the stock trades at around 80 times sales even after the pullback.

2. AST SpaceMobile

AST SpaceMobile took the hardest hit of the group, sliding more than 15% as of this writing. That fits its profile as the most speculative of the three. The company is building a network of satellites designed to beam broadband directly to ordinary smartphones. The vision is ambitious. But it is largely still just a vision.

AST's financials drive this point home. The company generated just $14.7 million in revenue in the first quarter, yet trades at a market value in the tens of billions and a price-to-sales ratio in the hundreds.

The company is burning cash as it builds out its constellation. It does notably hold more than $3 billion to fund the effort. It is targeting getting about 45 of its BlueBird satellites in orbit by the end of 2026.

There's an irony worth noting, too.

AST has three more satellites set to launch in mid-June -- aboard a SpaceX Falcon 9 rocket. For all the talk of these companies competing with SpaceX, several still depend on it to reach orbit.

3. Intuitive Machines

Intuitive Machines dropped about 13%. Unlike AST, though, this is a company with sizable revenue. Its first-quarter sales came in at about $187 million -- nearly triple the year-ago figure, helped by its acquisition of satellite builder Lanteris.

The lunar specialist also carries a backlog of about $1.1 billion, including NASA and national security work, giving it more visibility into future revenue than most of its peers. And it recently posted its first quarter of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), marking a small but meaningful step toward profitability.

Still, the recent stretch hasn't been all good. The company announced a plan earlier this month to sell up to $500 million in new stock, a move that would dilute existing shareholders, and it was passed over for a set of NASA lunar-rover awards that went to competitors.

With a $4.3 billion market capitalization and just $187 million in first-quarter sales, the stock isn't cheap either.

Warning or opportunity?

So, is this a chance to buy the dip, or a signal to stay away?

If the move really was driven by investors shuffling money toward the SpaceX debut, then a one-day drop in unrelated businesses is mostly noise. But these stocks were richly valued before this week, and a high-flying growth stock tends to fall hardest when sentiment turns, regardless of the trigger. Rotation may have lit the match, but these stocks were arguably overdue for a correction.

Of the three, Rocket Lab looks like the most defensible business, with Intuitive Machines a more speculative bet on lunar and government work, and AST SpaceMobile the furthest from proving its model.

But none of these stocks got cheap enough on this drop to make them buys. I'd treat the sell-off as a reason to give these stocks a second look, not as a reason to buy them.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile, Intuitive Machines, and Rocket Lab. The Motley Fool has a disclosure policy.