AST SpaceMobile vs. Rocket Lab: Which Space-Focused Stock Is a Better Buy in 2026?

The new space race is less about moon landings and more about orbital utility. Choosing between AST SpaceMobile (NASDAQ:ASTS) and Rocket Lab USA Inc. (NASDAQ:RKLB) requires deciding which unique infrastructure path holds more promise.

AST SpaceMobile aims to eliminate dead zones by connecting mobile phones directly to satellites, while Rocket Lab provides the rockets and components that get hardware into space. Both companies operate in high-growth niches but differ significantly in their business models, financial stability, and technical challenges for retail investors to consider.

The case for AST SpaceMobile

AST SpaceMobile focuses on a first-of-its-kind space-based cellular broadband network to connect standard smartphones directly to satellites. The company has already formed definitive commercial agreements with major partners like AT&T Corp. (NYSE:T), Verizon Communications Inc (NYSE:VZ), and Vodafone Corp. (NASDAQ:VOD). This strategic positioning makes it a prominent player among communication stocks while serving both commercial and government applications.

In FY 2025, revenue reached about $70.9 million, representing massive growth of approximately 1,500% compared to the prior year. Despite this top-line surge, the company reported a net loss of about $341.9 million, resulting in a net margin of negative 480%. This net loss is typical for infrastructure firms investing heavily in their first satellite constellations before reaching full scale.

As of its December 2025 balance sheet, the debt-to-equity ratio is 1.2x. This metric compares total debt to shareholder equity, which is the value left for owners after all liabilities are paid. Its current ratio is roughly 16.4x, and free cash flow reached nearly negative $1.1 billion, which represents cash from operations minus capital expenditures.

The case for Rocket Lab USA

Rocket Lab provides end-to-end space solutions, ranging from launch services to satellite design and manufacturing. It serves a wide array of government and commercial customers, including NASA and the U.S. Defense Department. The company is currently working toward acquiring Iridium Communications (NASDAQ:IRDM), which would significantly expand its presence in on-orbit management and communications while increasing its vertical integration.

In FY 2025, revenue reached close to $602 million, reflecting growth of roughly 38% over the previous fiscal year. The company reported a net loss of approximately $198 million, resulting in a net margin of negative 33%. This result marks a significant improvement in net margin compared to the negative 44% reported in FY 2024, showing progress toward reaching a break-even point.

According to its December 2025 balance sheet, the debt-to-equity ratio is approximately 0.1x. Its current ratio is close to 4.1x, indicating the company has ample liquid assets to handle its upcoming bills. Free cash flow for FY 2025 was approximately negative $322 million, which reflects cash generated from business activities minus capital expenditures, with the deficit driven by heavy spending on the Neutron rocket program.

Risk profile comparison

AST SpaceMobile depends heavily on mobile network operators and requires consistent regulatory approvals to access wireless spectrum. Financial risks are significant due to its history of net losses and the high capital requirements of its satellite constellation. The company also faces stiff competition from satellite providers like Space Exploration Technologies (NASDAQ:SPCX) and carries risks of operational problems with its satellite launches.

Rocket Lab faces risks associated with the successful development of its Neutron launch vehicle and maintaining a high launch frequency. It is highly dependent on a few key customers, making its revenue sensitive to government budget and policy changes. Customer concentration like this adds a layer of risk to the business, as does competition from large aerospace firms like Northrop Grumman Corp. (NYSE:NOC) or Lockheed Martin Corp. (NYSE:LMT).

Valuation comparison

Rocket Lab appears slightly more expensive on a Forward P/E basis, though it carries a more established revenue base. The P/S ratio, which measures market value relative to sales over the past twelve months, is only available for Rocket Lab.

Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

AST SpaceMobile expects its space-based network to give it a significant business in a few years. Essentially, AST SpaceMobile is a direct-to-device play, providing full mobile phone compatibility with major carriers without the need for specialized equipment. Many of its potential clients are also equity holders in the company, including AT&T, Verizon, Bell Canada, Rakuten, Vodafone, Alphabet Inc. (nasdag:goog), American Tower (NYSE:AMT), and Telus (NYSE:TU).

By the end of 2026, the company should have 45 satellites, which will allow it to fully service the U.S., and that should start to supercharge revenue growth. For fiscal 2026, Wall Street sees $168 million in sales, jumping to $582 million the following year. The company is projected to turn its first modest profit in 2029. Free cash flow appears much more manageable, with analysts expecting positive free cash flow in 2029.

Rocket Lab, meanwhile, made a huge splash in the market with its proposed $8 billion acquisition of Iridium Communications this year. The combination promises to make Rocket Lab a space powerhouse by combining its launch technology with the communications spectrum offered by Iridium. In short, Rocket Lab could very well be a serious competitor to SpaceX. Don't overlook Rocket Lab's expertise in sending small payloads into orbit, and it is closing in on the same reusable rocket technology that SpaceX has used to lower its customer prices.

Stand-alone Rocket Lab is seen boosting its revenue by more than one-third this year to about $961 million and narrowing its net loss to about $170 million. The Iridium acquisition is a big pill to swallow, but the combined business should generate $1.4 billion in revenue in 2027 and give investors a modest net profit.

Both these exciting businesses are worth investors' attention. But Rocket Lab's more reasonable -- if still highly priced -- ratios give growth investors a better entry point at this point in time.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile, American Tower, Lockheed Martin, Northrop Grumman, and Rocket Lab. The Motley Fool recommends TELUS, Verizon Communications, and Vodafone Group Public. The Motley Fool has a disclosure policy.