Should You Forget Tesla and Buy This Millionaire-Maker Stock Instead?

Key Points

• Shares of Rocket Lab USA have soared more than 50% year to date.

• The rise of space infrastructure is a long-term trend now unfolding.

• It will pick up speed as space travel becomes cheaper and more reliable.

• 10 stocks we like better than Rocket Lab ›

Is it time to move on from Tesla stock? After the first six months of 2025, many investors might be tempted to do so. As of this writing, shares of the electric vehicle maker are down 22%, leaving many investors very disappointed.

While I'm not prepared to move on from Tesla, there are other innovative companies that investors should keep an eye on. Today, I want to cover one of them, Rocket Lab USA (NASDAQ: RKLB). Unlike Tesla, its shares have been on fire so far this year, with a year-to-date return of more than 60%.

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Here's what you need to know about the company and its stock.

Image source: Getty Images.

Rocket Lab USA

The first question investors should ask is: What exactly does Rocket Lab USA do? Well, it's a leader in the field of rocketry and orbital deployments. The company partners with governmental and commercial organizations to send up satellites and other space-based assets into orbit.

Like its better-known competitor, SpaceX, Rocket Lab is riding a fast-growing trend: the expansion of space infrastructure. In short, the need for more high-tech equipment in space is increasing as governments and businesses alike turn skyward. Everything from logistics tracking to farming can now incorporate orbital technology, and Rocket Lab is stepping up by expanding access to orbital launches.

The company has already completed 10 successful launches of its Electron rocket this year, bringing its total to 68 overall. What's more, the company is progressing toward the use of its reusable Neutron rocket. That program aims to further expand Rocket Lab's overall launch profile by incorporating a reusable rocket (Neutron), which then lands on a 400-foot landing platform. By integrating reusable rocketry, RocketLab aims to lower launch costs, making space-based infrastructure more affordable -- and appealing -- to a growing list of organizations.

As the company continues to ramp up launches, its financials are poised to improve. Over the past 12 months, Rocket Lab has generated $466 million in revenue, up 32% year over year. As the company's Neutron program comes online, Rocket Lab's revenue growth should accelerate. According to consensus estimates compiled by Yahoo! Finance, sell-side analysts expect Rocket Lab to generate $890 million in revenue in 2026, up 55% from 2025.

Yet, investors should know that Rocket Lab stock does carry risks. For starters, the company is unprofitable and lacks positive free cash flow. Second, any setback in its operations due to a launch malfunction could delay future missions, putting pressure on the company's balance sheet. While Rocket Lab has over $428 million in cash on hand, it also has $490 million in debt.

That means the company may need to raise further capital to service its debt and continue operations. Therefore, Rocket Lab stock isn't for every investor. As a high-flying stock -- in every sense of the phrase -- Rocket Lab may be too hot to handle for some investors.

Nevertheless, for investors who are willing to hold through volatility, Rocket Lab offers a chance to invest in the next great adventure for humankind: space. It's clear that humanity will want to achieve more in space in the decades to come, and for that to happen, reliable and cheap transportation to space will be necessary. Rocket Lab is well-positioned to be one of the early leaders in this field. Investors should take notice.

Should you invest $1,000 in Rocket Lab right now?

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Jake Lerch has positions in Rocket Lab and Tesla. The Motley Fool has positions in and recommends Rocket Lab and Tesla. The Motley Fool has a disclosure policy.