My Stocks and Shares ISA is exposed to some really exciting growth themes, including artificial intelligence, semiconductors, cybersecurity, and financial technology. But I don’t have any direct investments in space.
But hang on, I can hear you say, there’s SpaceX shares on the market now. Just buy some of those and ‘ta-da’, sorted.
As tempting as that idea is, I can’t bring myself to buy into the crazy valuation. SpaceX has a $1.95trn market cap yet is posting losses — it’s like an early Tesla on steroids!
But there’s an up-and-coming mini-rival in the shape of Rocket Lab (NASDAQ:RKLB), whose shares are down 47% since May.
Do Rocket Lab shares look more palatable? Let’s discuss.
How’s Rocket Lab like SpaceX?
As the name implies, the company makes rockets (specifically, Electron and the larger Neutron, which is still under development). Last year, it carried out 21 successful missions with Electron and HASTE (a modified variant of Electron).
That was a record for Rocket Lab, as was the $602m of revenue it brought in for 2025 (up 38%). The momentum continued into Q1, when revenue jumped 63.5% to $200m.
Of course, this pales into insignificance next to SpaceX’s 165 launches last year with its Falcon 9 rocket (and $18.7bn in revenue). Rocket Lab’s Neutron is designed to compete with Falcon 9 in the medium-lift market, but it’s not ready yet.
Still, there are similarities here because Rocket Lab also makes satellites. And after its recent acquisition of Iridium Communications for $8bn, it now has a global satellite communications network.
In other words, Rocket Lab is laying the foundations to also become a major vertically integrated space giant.
By marrying Iridium’s deep heritage, trusted infrastructure, and highly sought-after spectrum with Rocket Lab’s extensive and proven launch and manufacturing capabilities, we have the capability to unlock entirely new markets.
Sir Peter Beck, founder and CEO of Rocket Lab
Muskian obsession
Speaking of Sir Peter Beck (who is from New Zealand), this is another thing I like. Like Elon Musk, he’s a founder-CEO who is extremely passionate and ambitious.
After tinkering around with propellants as a teenager, he became obsessed and even built a jet pack. But instead of going to university, he founded Rocket Lab, turning it into the world’s second-most active commercial launch company.
Unlike SpaceX, the firm makes bespoke satellites and spacecraft components for others, including solar panels and flight software. It recently acquired Motiv, adding Mars-proven robotics to its suite of capabilities.
In Q1, Rocket Lab’s order backlog reached $2.2bn, and it has entered Europe through an acquisition. The long-term growth in Europe could be substantial, given the continent’s somewhat ambivalent attitude to Elon Musk/SpaceX.
In March, Rocket Lab successfully completed its first dedicated launch for the European Space Agency.
Two concerns
Rocket Lab ticks all the boxes I look for in a growth stock, except for two. The first is that it’s expected to stay loss-making until at least 2027, which adds risk.
Second, the price-to-sales ratio is around 50 — on a forward-looking basis. At this price, there can be no operational hiccups, which is unlikely when you’re dealing with volatile rockets.
Even though it’s crashed 47%, I believe I’ll get this stock at a lower price, if I’m patient. So that’s what I’ll be.
Should you invest £5,000 in Rocket Lab right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rocket Lab made the list?
Ben McPoland has no position in any of the companies mentioned.
