Better Space Stock: Rocket Lab vs. AST SpaceMobile (Hint: It Comes Down to Dilution)

The space race is losing steam. Businesses related to the space economy have seen their stock prices falter, including AST SpaceMobile (NASDAQ: ASTS) and Rocket Lab (NASDAQ: RKLB), with the former down 72% from its highs and the latter down 66%.

Both businesses have ambitious plans to capture future economic value from the growing space economy. Which one is the better buy for your portfolio today? Ultimately, it comes down to revenue, cash burn, and share dilution. Here's why.

Image source: Getty Images.

Rocket Lab's scaling business

If you are looking for the most direct competitor to Space Exploration Technologies, then Rocket Lab is a candidate for your portfolio. The company is led by founder Peter Beck and has a successful track record of delivering commercial and military payloads to space with its small Electron rocket. This, along with its satellite and space products business, has helped revenue grow from nearly nothing a decade ago to $769 million over the last 12 months.

Like SpaceX, Rocket Lab has ambitions beyond where its business currently stands. It is developing a new, larger rocket called the Neutron, which will be able to carry larger payloads into orbit, thereby generating more revenue per launch. It recently acquired Iridium Communications to accelerate the development of its own satellite network, which it will hopefully be able to grow by launching on its own Neutron rockets.

Iridium will also bring more financial might to Rocket Lab's business. It generated $246 million in revenue last quarter alone, and had around $200 million in positive free cash flow through the first nine months of 2026. This does not offset Rocket Lab's entire $110 million in quarterly cash burn, but it will help the company stabilize its financial statements as it seeks greater scale and vertical integration in the space economy.

AST SpaceMobile's massive cash burn

AST SpaceMobile is a much different business. It is aiming to disrupt the satellite internet market -- specifically Starlink -- with a constellation of satellites with massive arrays that can directly connect internet to mobile devices anywhere in the world, without the need for a satellite terminal.

The technology has a lot of promise, if it can work like management says it can. Telecommunication partners are lining up, with AST SpaceMobile hoping they can upsell its service to their customers, sharing revenue between the two businesses

However, so far, AST SpaceMobile has been slow to launch satellites into orbit, repeatedly delaying the launch of its commercial satellite network in the United States. It is now burning over $700 million in quarterly cash flow as it aims to ramp up manufacturing of its massive satellites and get them into orbit through launch partners, but a backlog of commercial launches grinds satellite deployment to a halt. It is also trying to work with a direct competitor, SpaceX, which will prioritize its own Starlink satellites over a potential disruptor.

RKLB Shares Outstanding (Quarterly) data by YCharts

Which stock is the better buy today?

In the area of revenue and cash flow, Rocket Lab has a superior position to AST SpaceMobile today. It is also better in terms of share dilution. The company is not immune to raising funds through share offerings, with its outstanding shares up 33% over the last five years. However, AST SpaceMobile's shares outstanding are up a whopping 479% in the last five years, which is a massive drag on per-share value creation.

With significant cash burn and little revenue to show for it, AST SpaceMobile may soon need to return to the capital markets to raise funds. This is yet another reason investors should consider buying Rocket Lab as a space-economy stock, rather than AST SpaceMobile.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile and Rocket Lab. The Motley Fool has a disclosure policy.