SpaceX’s initial public offering this month is drawing renewed attention to the space economy, but a handful of other publicly traded companies are positioning themselves as alternatives for investors who want exposure beyond Elon Musk’s dominant venture.
One of the most frequently cited is Rocket Lab, a California-based launch provider founded two decades ago in New Zealand. Led by self-trained engineer Peter Beck, Rocket Lab has launched 88 small-payload rockets into low-Earth orbit. Only four of those launches have failed, with the most recent failure occurring in 2023, according to company disclosures.
Rocket Lab is one of only a few companies in the world that can launch rockets into orbit, though at a smaller scale than SpaceX. The company’s ability to deliver payloads reliably has given it an edge over competitors such as Virgin Orbital and Astra, which have struggled with orbital launches. Blue Origin, the private space company founded by Amazon’s Jeff Bezos, has also faced notable setbacks.
Rocket Lab is now moving beyond its small-rocket niche. The company plans to launch its first medium-lift rocket, named Neutron, later this year. The rocket is designed to carry payloads up to 13 metric tons. While that remains smaller than SpaceX’s Falcon Heavy, which can place nearly 64 metric tons into low-Earth orbit at a cost of about $1,500 per kilogram, Neutron’s estimated $4,000 per kilogram is roughly on par with some versions of SpaceX’s Falcon 9, the company said.
The demand for launch services, Beck said on a conference call with analysts after Rocket Lab’s most recent quarterly earnings report, is reflected in a backlog of more than 70 launches. The company’s revenue grew 38% to more than $600 million last year, and its revenue backlog stood at $2.2 billion at the end of the first quarter.
Rocket Lab has made significant inroads with defense customers, who value the ability to launch smaller payloads on shorter schedules rather than ride-sharing on larger rockets. In March, the company won a $190 million Pentagon contract to help test hypersonic flight conditions using its smaller Electron rockets. It is also working with defense contractor RTX on the U.S. Golden Dome, a space-based missile-defense shield.
“We would much rather be building out our own data centers in orbit and leasing that capacity out to customers rather than just building something for them,” said Adam Spice, Rocket Lab’s finance chief, referring to a vertical-integration strategy the company is pursuing to participate in the growing market for space-based artificial intelligence.
Despite its growth, Rocket Lab is not inexpensive. Its shares are up more than 50% this year, leaving the company’s price-to-sales ratio roughly on par with SpaceX at SpaceX’s targeted IPO valuation. But analysts noted that it is easier for Rocket Lab to grow into its valuation from a smaller base than for SpaceX to grow fast enough to justify its own.
The broader space-economy stock market includes other players with less certain prospects. Lunar-exploration specialist Intuitive Machines serves a market that may not boom, according to the Wall Street Journal. Satellite operators such as AST Spacemobile, Viasat and Iridium have tangible growth tied to rising demand for mobile phone and internet-of-things connections from space, but face increasing competition. Satellite operators generated $24 billion in revenue last year, according to New Street Research, a figure far below the $1.6 trillion potential market SpaceX cited in its IPO filing.
SpaceX already dominates satellite-based internet with its Starlink service, which New Street estimates accounted for half of the industry’s revenue last year. Amazon, through its Amazon Leo subsidiary, is also building a satellite internet network and is a well-funded competitor. In April, Amazon agreed to acquire satellite operator Globalstar, citing its network and spectrum assets, potentially making smaller incumbents like AST, Viasat and Iridium acquisition targets.
“SpaceX is synonymous with space for many investors,” the Wall Street Journal wrote. “But it doesn’t have the cosmos to itself.”