After a Breakout Quarter, Rocket Lab Is Starting To Look Like an Interesting SpaceX Rival

The space stocks might be about to enter their most exciting period to date, with SpaceX readying for an IPO that is going to spark a tidal wave across the broad market. Could Elon Musk’s $1.75 trillion (or maybe $2 trillion) empire change the way that investors view the space stocks?

As things like satellite connectivity and orbital AI data centers become more of a reality and less of a thing of science fiction, we might be entering a time where space plays become more of a highly investable growth play, and less of a speculative question mark. Like it or not, SpaceX’s IPO will change the way the S&P 500 and Nasdaq 100 will look.

Of course, the latter will be changed far sooner than the former, given recent rule changes that will give the coming slate of AI mega IPOs a “fast track,” allowing the mega-cap titans to be eligible for inclusion in the Nasdaq after 15 short days. If ever there was a strong case for preferring the Nasdaq 100 over the S&P 500, it’ll be after SpaceX and the rest of the mega IPOs touch down.

As the countdown to the big SpaceX IPO continues, some investors might be wondering if it’s still worth it to consider some of the adjacent plays. Of course, in terms of size, nothing else out there comes close. And, indeed, you can’t really put a price on Elon Musk’s visionary leadership.

Rocket Lab stock has taken off. It’s looking like a hot SpaceX alternative

In any case, though, a name like Rocket Lab (NASDAQ:RKLB | RKLB Price Prediction) looks that much more interesting after reporting a quarterly earnings result that impressed Wall Street in a big-time way. The company clocked in revenue that was up just shy of 64% year over year. The backlog is becoming quite massive, and gross margins are on the right track. It feels like the space companies are starting to become serious growth business models. And as SpaceX finds its way onto the Nasdaq, pretty soon, your average investor will have a good amount of exposure.

Just like Tesla (NASDAQ:TSLA) led the way into the EV (electric vehicle) market, it seems like SpaceX is about to show the world that space is a seriously profitable undertaking. Of course, not every EV firm racing into the scene was able to compete with the likes of a Tesla. While Rocket Lab certainly does stand out as one of the most promising space companies that isn’t named SpaceX, I do think that investors should broaden their horizons and also keep watch of what else is out there.

With shares of Rocket Lab gaining another 7% on Thursday, the name is now up close to 75% year to date. And with a $76.7 billion market cap, the rocket play is starting to get up there in market cap. Much of Wall Street is warming up to the names despite the latest surge, too.

The bottom line

While it will be tough to pick and choose the winners (outside of SpaceX), I do view Rocket Lab as one of the names that could be worth a premium, given its execution thus far. If it can keep it up, maybe soon Rocket Lab, just like SpaceX, will become a household name and a stock that many passive investors will suddenly become exposed to by way of index funds.

Any way you look at it, the commercial opportunity is real. And while Rocket Lab stock has already taken off, with famed investor Cathie Wood reportedly taking profits, I do think the name is becoming a must-watch. Who knows? If there’s a rotation into SpaceX that causes a pullback, maybe it’ll be more of a must-buy?