Space investing has been one of the hottest topics of the market lately. The commercial space industry got all the limelight last week, when SpaceX (SPCX) completed the largest initial public offering (IPO) in market history on Friday, June 12. Now that Elon Musk's private space giant has officially entered the public markets, investor attention has spread across the entire space sector.
This renewed excitement is shining a spotlight on smaller businesses that may benefit from the next wave of growth. Among the most compelling names are Rocket Lab (RKLB) and Redwire (RDW), but only one offers the stronger growth story over the next decade.
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The Case for Rocket Lab
Valued at $63.2 billion by market capitalization, Rocket Lab is a space company that provides launch services, satellite manufacturing, spacecraft components, defense technologies, and space systems. It primarily serves commercial customers, governments, and national security agencies. RKLB stock has surged more than 52% year-to-date (YTD), outperforming the broader market's gain of almost 10% so far this year.
www.barchart.com Currently, Rocket Lab is well known for its Electron rocket, which launches small satellites into orbit. However, its upcoming Neutron rocket is a larger reusable rocket designed for satellite constellations, defense missions, and other higher-value launches. Neutron could significantly expand Rocket Lab's long-term market opportunity. In its most recent first quarter, the biggest signal for future growth was Rocket Lab’s backlog of $2.2 billion, a remarkable 108% increase from a year earlier. Launch services accounted for 41.5% of this backlog, while space systems contributed the rest. Management expects the company to recognize roughly 36% of this backlog as revenue in the next 12 months.
Rocket Lab secured 31 Electron and HASTE launch contracts along with five Neutron launch agreements during Q1. The company now has a total of 70 launches in its backlog, with its 100th launch coming later in 2026. The biggest contributor has been HASTE, Rocket Lab's suborbital launch vehicle designed for hypersonic testing and missile defense applications. The company has secured a $190 million contract covering 20 HASTE launches through Kratos (KTOS) and the U.S. Department of Defense. HASTE now accounts for nearly one-third of Rocket Lab's launch backlog, positioning the company at the center of rapidly growing U.S. missile defense and national security spending programs.
Meanwhile, the space systems segment contributed $136.6 million to total revenue, increasing 57% year-over-year (YOY), fueled by strong demand for Rocket Lab's satellite platforms business. Total revenue in the quarter increased by almost 64% to $200.3 million. Perhaps the most important long-term catalyst is Neutron. The company has five dedicated Neutron launches and three Electron launches scheduled through 2029. If Neutron enters service successfully, Rocket Lab will gain access to a much larger medium-lift launch market currently dominated by only a handful of providers. Financially, Rocket Lab remains healthy to fund these ambitions, with $1.48 billion in cash, cash equivalents, restricted cash, and marketable securities at the end of the quarter.
Overall, on Wall Street, RKLB stock has a consensus “Strong Buy” rating. Of the 18 analysts covering the stock, 13 rate it as a “Strong Buy,” one has a “Moderate Buy,” and four analysts have a “Hold" rating. The average target price of $107.07 implies potential upside of 2% from current levels, while the high target of $150 suggests potential upside of 43% from here.
www.barchart.com The Case for Redwire
Valued at $2.8 billion by market cap, Redwire is a much smaller company compared to Rocket Lab. Redwire is more of a “picks-and-shovels" play on the industry, operating as a space infrastructure company that develops the technology and hardware powering space missions, including satellites, spacecraft components, robotics, sensors, solar arrays, and defense systems.
RDW stock has climbed an impressive 78% YTD, outpacing the broader market and even RKLB stock.
www.barchart.com As a diversified space and defense technology platform, Redwire is slowly gaining traction. In the first quarter, revenue increased 58% YOY to $97 million. Notably, the company continues to win new contracts, resulting in a backlog of $498 million. But what’s interesting is Redwire doesn’t want to just secure contracts to grow; it is deliberately investing in programs where it sees the highest long-term returns. Research and development spending increased to $12.6 million in the quarter, with investment aimed at next-generation spacecraft, quantum-secure satellite constellations, and lunar infrastructure, among other projects.
Recently, Redwire was chosen as one of 14 vendors for the U.S. Space Force's Space Systems Command's Andromeda contract, a 10-year program valued at $6 billion. The company believes this contract will help it become a prime contractor for next-generation spacecraft and space-domain awareness missions. Redwire also secured another contract under the European Space Agency's (ESA) QKDSat program to develop a quantum-secure satellite, as well as a contract from the Belgian Ministry of Defense to build Belgium's first national security satellite.
Financially, Redwire is in a stronger position than it was a year ago, with total liquidity of $175.2 million. With a $498 million backlog, expanding defense opportunities, and growing exposure to next-generation space technologies, Redwire appears to be on track to continue its growth trajectory.
Overall, on the Street, RDW stock has a consensus “Moderate Buy" rating. Of the 10 analysts covering the stock, six rate it as a “Strong Buy,” three say it is a “Hold,” and one analyst has a “Moderate Sell" rating. The average target price of $15.67 implies potential upside of 16% from here, while the high price estimate of $24 implies potential upside of 78% from current levels.
www.barchart.com The Better Buy for the Next Decade
In my opinion, Rocket Lab is the stronger growth story for the next decade. It is no longer just a launch company. Rocket Lab is evolving into a vertically integrated space and defense platform with growing exposure to launch services, satellite manufacturing, missile defense, national security programs, robotics, and much more. Rocket Lab is also joining the elite Nasdaq-100 group this month. This improves visibility for the company, which was once viewed as a niche launch provider.
Rocket Lab appears to have multiple pathways to sustain growth well into the next decade, which is why I believe RKLB stock is the better space stock to buy now.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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