Space exploration has undergone an incredible transition from government-led initiatives to ventures led by the private sector, with companies like SpaceX paving the way. According to McKinsey, the space economy is poised to skyrocket, potentially reaching a staggering $1.8 trillion by 2035.
SpaceX might be on some investors’ radar, but it isn’t publicly traded. For those looking to dive into the space economy, Rocket Lab USA (NASDAQ: RKLB) presents an excellent alternative. Fresh off a year of record launches, Rocket Lab has secured its position as the second-most-used launch service in the U.S., just behind SpaceX.
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On top of that, Rocket Lab is set to unveil its larger rocket this year, which could seriously boost its margins and expand its capabilities. Here’s why Rocket Lab could be a good opportunity to invest in the space economy today.
Since its creation in 2017, Rocket Lab has successfully completed 61 launch missions, including a record 16 in 2024. The company has become a go-to partner for companies launching small satellites into orbit with its flagship Electron rocket, a small-lift launch vehicle designed to carry payloads to low Earth orbit.
While Rocket Lab posted a record year, the company remains well behind SpaceX. Last year, SpaceX sent 138 rockets into space, far more than any other space company. SpaceX has a 15-year head start on Rocket Lab. It also has larger rockets and greater payload capacity, but this is one area where Rocket Lab intends to catch up.
Rocket Lab has been developing its Neutron rocket for several years now. This reusable medium-lift rocket can carry payloads of up to 13,000 kilograms (28,660 pounds) to low Earth orbit, making it 40 times larger than the company’s small-lift Electron launch vehicle.
This larger launch vehicle will help Rocket Lab better compete with SpaceX’s Falcon 9 launch vehicle and should enable Rocket Lab to earn civil and defense contracts with larger payloads. The company projects that its Neutron rocket could earn 6 times the revenue and profit of its Electron vehicle, paving the way for growing margins and more significant profits.
Image source: Rocket Lab USA.
The company planned to launch its Neutron rocket in mid-2025, but it has pushed this timeline back slightly and is now targeting the second half of this year for a launch.
Bleecker Street Research (which is related to the short-seller Bleecker Street Capital) says that industry experts it talked to think the launch will happen between mid-2026 and mid-2027 because of production delays. However, investors should remember that Bleecker Street Capital is short Rocket Lab, meaning it profits when Rocket Lab’s stock declines.
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