Should You Buy Rocket Lab Over SpaceX? Here's My Take.

The air has begun to escape from some overinflated corners of the stock market, bringing down space stocks in the process. Space Exploration Technologies (NASDAQ: SPCX) has quickly fallen about 40% from highs set about the time of its initial public offering (IPO) in June, while Rocket Lab (NASDAQ: RKLB) is down almost 60% from its 52-week high, beginning its tumble about the same time SpaceX made its debut.

Investors are beginning to take another look at these space stocks and assessing whether they are a good value right now. But is Rocket Lab a better space stock to buy than SpaceX? Here's my take.

Tremendous growth ahead

As competitors in the space economy, both Rocket Lab and SpaceX have significant growth opportunities in the years ahead. There are an estimated 1 million satellites proposed for launch into orbit, compared to about 15,000 active today, creating an enormous backlog for launch providers like SpaceX and Rocket Lab.

SpaceX is the current leader in launch services, generating $4 billion in revenue last year and planning to keep growing with the upcoming debut of its Starship rocket. Rocket Lab's launch revenue was just $199 million in 2025, but is set to grow with the debut of its own larger rocket, the Neutron, sometime later this year or in 2027. There are few -- if any -- competitors that can capitalize on this satellite backlog like these two businesses.

Both businesses also have significant opportunities with their own satellite constellations, and SpaceX is again the leader with its Starlink internet service. Starlink generated $11.4 billion in revenue in 2025 and is growing 50% year over year. Rocket Lab plans to build its own vertically integrated service through its recently announced $8 billion acquisition of Iridium, but it is still years away from what SpaceX can offer today.

Founder leadership, but one with more focus

Similarities continue between Rocket Lab and SpaceX, with both operating as founder-led businesses. Rocket Lab was created from scratch by Peter Beck in New Zealand, an unlikely place to build one of the modern commercial space giants. Beck has a fantastic track record of launch success with new rockets and has been focused intensely on this business for two decades now, despite the odds stacked against him.

SpaceX, as you probably know, is led by the idiosyncratic Elon Musk. Musk has propelled SpaceX to unbelievable heights (literally) and is known for eccentric ideas that somehow work. This can be a good thing when something like SpaceX's launch business or Starlink start generating billions in revenue. But it also adds risks when Musk comes up with new grandiose plans, such as his recent artificial intelligence (AI) endeavors.

Musk wants to invest tens of billions, if not hundreds of billions, in data centers for AI on Earth and in orbit, believing it is the path to lower AI compute costs. If this endeavor is successful, it could be wildly profitable. But if it is not, investors could see billions in losses in the years ahead.

Which stock is the better buy?

Another aspect where SpaceX and Rocket Lab need to be compared is valuation. At the time of SpaceX's IPO, Rocket Lab and SpaceX had price-to-sales ratios (P/S) of more than 100, which is unheard of for companies of this size. Rocket Lab's market cap has fallen to $38 billion, while SpaceX remains one of the most valuable companies in the world, with a market cap of $1.5 trillion.

Size should matter in valuation, meaning that a smaller company like Rocket Lab could be worth owning even if it trades at an expensive-looking multiple today.

If forced to choose, Rocket Lab looks like the better buy right now. But neither is making it into my portfolio at these prices.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.