SpaceX IPO vs. Rocket Lab: Which Space Economy Stock Is the Better Buy? – The Motley Fool

SpaceX priced its IPO at $135 per share, giving it a valuation of roughly $1.77 trillion and making it one of the largest public offerings in history.
And that creates an interesting question: Is it better to buy the dominant player in the space industry, which has such a massive valuation, or a smaller space-related company that may still have more room to grow and potentially give you more bang for your buck?
The answer depends largely on what type of investor you are.
There's no denying that SpaceX has become the most important company in the modern space economy.
The company dominates commercial launch services, operates the rapidly growing Starlink satellite network, and continues developing Starship, a next-generation launch system designed for missions ranging from national security to deep space exploration.
The problem isn't the business.
It's the valuation.
$1.77 trillion is massive. It actually exceeds the GDP of Saudi Arabia.
To put that in perspective, Saudi Arabia ranks No. 19 in global GDP rankings.
That's not trivial.
Make no mistake: if you buy SpaceX, you're paying a premium price for a premium asset. And for SpaceX to double its valuation, it would have to be worth more than $3.5 trillion.
That's not to say it's impossible, but it's also a very high bar.
Image source: Getty Images.
Rocket Lab (RKLB 2.87%) is much smaller, but that's exactly what makes the comparison interesting. Especially when you consider that Rocket Lab is far more than a launch company. Launch services are just part of the business.
It also builds satellites, spacecraft components, solar arrays, flight software, and other infrastructure used throughout the space industry. And its customer base includes commercial operators, NASA, and the U.S. Department of Defense.
It's also already generating meaningful revenue.
In 2025, Rocket Lab reported record revenue of approximately $602 million, up 38% year over year.
The company currently boasts a backlog valued at more than $2 billion, and in Q1, 2026, reported record revenue of $200 million, exceeding management's guidance for revenue, gross margin, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Operationally, the company continues executing as well. Rocket Lab completed 21 launches during 2025 with a 100% mission success rate and secured an $816 million contract from the United States Space Development Agency to build 18 satellites.
The biggest catalyst remains Neutron, Rocket Lab's larger partially reusable rocket currently scheduled for its first launch in late 2026. If successful, Neutron would allow Rocket Lab to compete for larger commercial and government launch contracts currently dominated by SpaceX.
Of course, there are risks.
Rocket Lab remains unprofitable, and Neutron has already experienced development delays.
So essentially, a bet on Rocket Lab is a bet on management successfully scaling the business while expanding into larger launch opportunities.
If you're looking for the highest-quality space company in the world, the answer is SpaceX.
But if you're looking for the better risk-reward opportunity, Rocket Lab has a very compelling case.
SpaceX already carries a valuation approaching $2 trillion. Rocket Lab remains a fraction of that size despite generating hundreds of millions of dollars in annual revenue, building a growing backlog, and expanding across multiple segments of the space economy.
That doesn't mean Rocket Lab is the safer investment. It's not.
It simply means the upside may be greater if management continues executing.
SpaceX may remain the undisputed leader in space. But if you're looking for outsize returns and don't mind a little risk, Rocket Lab could deliver quite well.
Jeff Siegel 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.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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SpaceX offers dominance, but Rocket Lab offers greater upside.

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