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The Nasdaq Composite is jam-packed with growth stocks of all shapes and sizes. So much so, the index has outperformed the S&P 500 over the past decade, returning 282% versus 185% for the latter (excluding dividends).
Here’s one Nasdaq stock that’s caught my eye.
Investing in space
Rocket Lab USA‘s (NASDAQ: RKLB) a vertically integrated rocket and satellite company that went public in 2021.
Since then, the share price has risen by around 160%. However, the stock’s really taken to the heavens in the past year, surging from $4 to $26. That’s a gain of more than 500%!
I’ve been wanting to invest in the global space economy since I read Christian Davenport’s 2018 book The Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos.
Unfortunately, Musk’s SpaceX and Bezos’ Blue Origin remain private companies, meaning everyday investors like myself can’t buy shares in them. That’s a shame because SpaceX’s value has increased 10-fold since 2018!
Anyway, Rocket Lab stock does offer a way to invest in the booming space economy.
Rocket Lab vs SpaceX
Unlike SpaceX, which focuses on larger payloads and wants to eventually colonise Mars, Rocket Lab currently specialises in the small satellite launch market. Governments and commercial customers pay it to get their technology into space.
| SpaceX | Rocket Lab | |
|---|---|---|
| Founded | 2002 | 2006 |
| Market value | $350bn (private) | $12.3bn |
| Launches (2024) | 134 | 16 |
| Focus | Mars, Starlink, lunar missions | Small satellite launches, spacecraft services |
| Forecast revenue (2025) | $15.5bn | $570m |
Of course, SpaceX is a beast, as it accounted for over half of all orbital launches globally last year. And its Falcon 9 rockets are fully reusable, whereas Rocket Lab’s existing rocket (Electron) isn’t. SpaceX also has its fast-growing Starlink satellite internet service.
Still, Electron did 16 successful launches in 2024, which was 60% more than the year before. This helped lift the company’s revenue 78% to $436m. Revenue in Q4 2024 reached $132.4m, a 382% increase compared to Q4 2021 (its first full quarter after going public).
Later this year, Rocket Lab’s aiming to launch its new Neutron rocket. Its larger size and increased payload capacity should open up opportunities in the medium-lift launch market.
Challenges
Now, the main risk here is that the company still isn’t profitable. In Q1, it reported a $61m net loss, and is expected to lose money for the rest of the year.
Also, Rocket Lab’s aiming for partial reusability with Neutron. But this is notoriously difficult to master (most experts said, wrongly, that SpaceX would never achieve it). Explosions and setbacks are inevitable for all players, including SpaceX.
After all, it’s not called rocket science because it’s easy!
On my list
Encouragingly though, analysts expect the firm to turn profitable in 2026, with revenue nearly tripling from last year’s levels to reach $1.2bn by 2027.
Looking ahead, McKinsey estimates the global space economy will be worth $1.8trn by 2035, up from $630bn in 2023. And Rocket Lab’s one of only five providers selected by the US Space Force as eligible to launch the nation’s highest priority national security missions.
So growth opportunities shouldn’t be an issue here, especially as the firm recently expanded into Europe via an acquisition.
Right now, the stock’s very pricey, trading at 14 times next year’s forecast sales. I’m hoping for a better entry price, but this is definitely one I’m eyeing up for my ISA at some point this year.
