Is Rocket Lab Stock a Safer Option for Space Investors Than SpaceX?
Key Points
Rocket Lab's revenue rose 62% last quarter.
It's been growing at a faster rate than SpaceX when comparing just space-related revenue.
Expectations will inevitably be higher for SpaceX than Rocket Lab due to its higher valuation.
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Investing in space is a huge growth opportunity for investors. Did you know that by 2034, the global space economy is projected to be worth more than $1.1 trillion? That's according to analysts from Fortune Business Insights. In 2025, it was estimated to be worth $648 billion. It's already large and is on track to become even more massive, and companies are investing heavily.
Space Exploration Technologies Corp (NASDAQ: SPCX), also known as SpaceX, is easily the most recognizable and largest company in the industry. But Rocket Lab (NASDAQ: RKLB) also makes for an intriguing investment. And with its valuation being a fraction of SpaceX's, expectations may not be nearly as high for it.
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Could Rocket Lab be a better and safer option for investors looking to take advantage of growth opportunities in space?
Image source: Getty Images.
Rocket Lab has been generating some impressive numbers
On Aug. 10, Rocket Lab released its second-quarter results for the period ending June 30. The company, which provides launch services and space systems, posted record revenue of $234 million for the period, up 62% from the same period a year ago. Its backlog also reached a record of nearly $2.4 billion.
Rocket Lab has been demonstrating some excellent results, showcasing strong demand. And its growth is likely to hit new heights once its larger Neutron rocket starts generating revenue for the business. Currently, it's the smaller Electron rocket that's driving growth, but Neutron is likely to be a more significant catalyst for the company's growth. Neutron may launch later this year, and if it does, that could send the space stock soaring.
Is Rocket Lab a better option than SpaceX?
SpaceX is the larger space company of the two, but its growth rate isn't as impressive. In its most recent quarter, space revenue totaled $962 million, up 29% year over year. The bulk of its revenue actually comes from its connectivity and artificial intelligence segments, not space.
For investors seeking a more pure-play space stock, Rocket Lab may be the better option. There's less noise and fewer other factors to consider. From that perspective, Rocket Lab could be a safer investment, as it doesn't have the same exposure to the tech sector that SpaceX does.
Plus, with a market cap of around $50 billion versus roughly $1.9 trillion for SpaceX, there will inevitably be less pressure on Rocket Lab to deliver strong numbers to justify its valuation. While both stocks are risky and unprofitable, for space investors, Rocket Lab may be a slightly less riskier option overall.
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
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