>July Outlook: Two Space Stocks to Consider Instead of SpaceX<

Key Points

• SpaceX will likely see significant volatility in the months following its IPO.

• Rocket Lab is up more than 50% this year and has just announced a major acquisition.

• Redwire is up roughly 65% this year and is emerging as a space and defense technology leader.

Space stocks are gaining traction this summer, driven largely by the hype around Space Exploration Technologies (NASDAQ: SPCX). The company’s record‑setting IPO last month raised nearly $86 billion, and its market cap now exceeds $2 trillion, placing it among the rare trillion‑dollar stocks.

However, the most talked‑about stocks are not always the best investment choices. SpaceX’s valuation is extremely high, meaning the market has already priced it for perfection.

Image source: Getty Images.

Space stock No. 1: Rocket Lab

Rocket Lab has enjoyed a strong rally, with its shares climbing about 1,680% over the past three years, including a gain of more than 50% in the current year. Investor enthusiasm has been fueled by the company’s end‑to‑end launch services.

The firm has completed more than 90 launches to date using two vehicle families. The Electron launch vehicle is a two‑stage system that places small satellites into orbit, while the Haste vehicle is suborbital and designed for testing high‑speed technologies. Rocket Lab is also developing a larger vehicle, Neutron, aimed at deep‑space missions and eventual human spaceflight.

The company operates two launch pads in New Zealand and one in Virginia. Its customers include private firms and government agencies such as NASA, which it is supporting for missions to Mars and the Moon. Other partners include the U.S. Space Force, the Japanese firm Synspective, and the Japan Aerospace Exploration Agency (JAXA), among others.

Rocket Lab recently announced an agreement to acquire Iridium Communications, a publicly traded operator of a low‑Earth satellite network that serves more than 2.55 million customers worldwide. The acquisition will combine Rocket Lab’s launch and satellite manufacturing capabilities with Iridium’s global satellite network, creating an integrated space company.

Space stock No. 2: Redwire

Redwire may not have the same hype as Rocket Lab, but it remains a solid performer. The stock is up nearly 400% over the past three years and has risen about 65% so far this year.

Redwire designs aerospace infrastructure, autonomous systems, and products that incorporate digital engineering and AI automation. The company contributed technology to NASA’s Artemis II mission, the first crewed lunar flyby since 1972. Astronauts used Redwire’s advanced optical imaging and sun‑sensor systems as part of the spacecraft’s internal and external camera suite, enabling in‑flight inspection.

Redwire also operates the first commercial greenhouse in space, located on the International Space Station. The facility is studying crop production in microgravity to support long‑duration human spaceflight.

In the defense arena, Redwire is one of 14 companies selected by the Space Force to compete for contracts under the 10‑year Andromeda program, which aims to track and identify objects in Earth orbit critical to communications and missile‑warning systems. The company’s defense‑technology revenue surged to $44.3 million in the most recent quarter, up from $9.2 million a year earlier, accounting for nearly all of its overall 58% revenue increase.

“The Andromeda contract vehicle is focused on rapidly fielding proliferated space domain awareness capabilities in geosynchronous orbit,” said CEO Peter Cannito. “We see this as a proof point for the success of our move up the value chain and further validation that we are strategically positioned as a trusted prime contractor on next‑generation spacecraft.”

Why these two stocks may be better than SpaceX

SpaceX, still riding the momentum of its IPO, is expected to remain volatile in the coming months as lockup restrictions expire and institutional investors begin to cash out. Its valuation is also extremely high, with a price‑to‑sales ratio of 115.

Rocket Lab and Redwire present contrasting alternatives. Both companies have completed their IPOs and have multi‑year performance records to back them up. Rocket Lab’s merger activity is generating interest, and its price‑to‑sales ratio, while elevated, is more modest at 85.5. Redwire, focusing on space infrastructure and defense, carries a much lower price‑to‑sales ratio of only 5.

Thus, while SpaceX offers exposure to a high‑growth narrative, its premium valuation and expected volatility can pose risks. Rocket Lab and Redwire provide access to emerging space trends with comparatively less expensive entry points.

Patrick Sanders 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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