3 Space Stocks: Ready for Liftoff or Burning Up on Reentry?

Key Points

• Space stocks pulled back sharply after the SpaceX IPO, driven by hype rather than any underlying business failure across the sector.
• Rocket Lab, AST SpaceMobile, and Intuitive Machines are viewed as leading candidates to reach profitability after SpaceX, each backed by growing contract pipelines.
• Analysts and institutional investors are increasingly bullish on these three stocks, with consensus price targets implying substantial upside for each.

Space stocks have been on a wild ride this year. Many, if not all, rose by 50% to 100% at the peak, if not more, only to fall back to earth once the SpaceX NASDAQ: SPCX IPO was completed. Yes, we can blame this sharp reset in space stock values on SpaceX, not because of any underlying failure, but simply due to hype. SpaceX is cool; it has an eccentric, headline-making CEO and unlocked the floodgates of institutional space investing. What it does not do is make space an advanced sector, or one that profits. Pockets of profitability exist; SpaceX’s Connectivity segment, which includes Starlink, is one, but they are few and far between. It will take some time for these stocks to fully recover.

The opportunity in space today is to pick up the pieces left by the SpaceX IPO and put them back together into a portfolio of winners. Space is valued at approximately $650 billion as of late August and is expected to grow at a modest single-digit CAGR over the coming years. Growth will be driven by declining launch costs and constellation demand, with commercial applications making up the bulk and defensive applications a large but still minority share. Commercial space stations and manufacturing platforms could soon take the place of existing infrastructure (which is limited) and open new paths to revenue and profits.

Profits are key, as most space companies, SpaceX included, face high upfront development and operating costs. SpaceX is forecast to achieve profitability soonest, potentially in the next fiscal year, followed by Intuitive Machines NASDAQ: LUNR, AST Space Mobile NASDAQ: ASTS, and Rocket Lab NASDAQ: RKLB. The question is which is best positioned today.

Rocket Lab Accelerates Launch Schedule

Rocket Lab is accelerating its launch schedule and has a major catalyst at hand. While its primary lift system, the Electron, is ramping, the company is about to bring the Neutron system to market. It is scheduled for first flights late this 2026 or early in 2027, setting the stage for a slow ramp over the subsequent three. The Neutron is Rocket Lab's medium-lift rocket, capable of carrying more payload into space at a lower cost and central to its profitability outlook. As it stands, Rocket Lab has one of the longest timelines to profits, but it is increasingly de-risked. The company has a visible pipeline of contracts for future capacity; it just needs the rockets to deliver.

Revenue is ramping in step with the launch pace. Q2 results reflect a year-over-year acceleration, more than 130% growth in the two-year stack, and narrowing losses. Backlog and guidance compounded the results, pointing to sustained strength, if not acceleration, in upcoming quarters.

Analysts’ sentiment and institutional interest are also ramping. MarketBeat data show that analysts' coverage is rising, sentiment is firming, and price targets are rising, with consensus forecasting about 70% upside. It also shows institutions own over 70% of the stock and are ramping up aggressive accumulation to record levels in early Q3.

AST SpaceMobile: On Track to Dominate 5G

AST SpaceMobile is more of a space-based play than a space pureplay, operating a constellation of satellites to support ground-based 5G operations. The constellation is populated by antenna super arrays that can beam signals directly to ground-based devices, providing limitless coverage. Today's story is the cost and time it takes to get satellites into orbit. Tomorrow's story is the large and growing number of contracts with global 5G service providers, enterprises, and governments. They back up a robust revenue and earnings outlook, with revenue in the midst of a significant ramp and profits still dependent on satellite deployment, service activation and cost control.

Analyst and institutional activity reflect continued interest in the stock, though not without risk. While sentiment is pegged at Hold, it is improving, and the consensus forecasts nearly 50% upside, with institutions buying. Institutions show even higher conviction, owning more than 60% of the stock and buying at a pace of more than $10 to $1 in early Q3. They underpin late-summer support, limit risk, and provide a launchpad for rallies, with the catalyst possibly being the expected launch of a U.S. satellite service with major mobile network partners.

Intuitive Machines: Your Guide to Lunar Landings, and Space Profit

Intuitive Machines has emerged as a mission-critical service with vertically integrated capacity to support moon-oriented missions.

Recent acquisitions increase its telemetry and communications capacity, while existing technologies include space infrastructure, payload protection, and lunar landers. Numerous contracts back its business, including government and NASA’s Artemis mission.

Results reflect accelerating demand and a path to profitability, with profitability expected in 2026 and broader earnings improvement expected after that. Upcoming results are likely to trigger price action, with analysts rating the stock a Moderate Buy, price targets firming, and consensus forecasting nearly 100% upside.