Key Takeaways
- SpaceX’s colossal private valuation, reportedly nearing £160 billion, generates sector-wide attention but offers a distorted lens for assessing smaller public competitors like Rocket Lab and AST SpaceMobile.
- The investment case for Rocket Lab hinges less on sector sentiment and more on its deliberate pivot from a small launch provider to a diversified space systems company, a strategy essential for long-term viability.
- AST SpaceMobile represents a high-risk, venture-style investment in the public markets, where success is a binary outcome based on executing unproven technology and navigating immense capital requirements.
- The notion that SpaceX’s success provides a direct “bullish” lift to peers is tenuous; a more probable second-order effect is the strategic need for governments and enterprise to cultivate alternatives, creating a tailwind for credible players.
The recent reports of SpaceX discussing a secondary share sale that would value the private entity at approximately £160 billion has, once again, ignited conversations about the broader space economy.1 This figure, a testament to its dominance in launch and satellite internet, naturally leads investors to seek out correlated opportunities in the public markets. The implication is that a rising tide lifts all boats, suggesting bullish sentiment for smaller players such as Rocket Lab and AST SpaceMobile. The reality, however, is far more complex. Rather than a simple case of sector-wide uplift, SpaceX’s gravitational pull creates a challenging environment where its success serves as both a benchmark and a formidable barrier, making company-specific execution a far more critical factor than any perceived halo effect.
A Tale of Three Orbits
Directly comparing a private behemoth like SpaceX to publicly listed companies is an exercise fraught with difficulty. SpaceX benefits from a scale, a level of vertical integration, and a portfolio of proven, cash-generating business units—namely its launch services and the Starlink satellite constellation—that its smaller rivals do not possess. Private market valuations are often forward-looking and less subject to the quarterly pressures of public scrutiny. For Rocket Lab and AST SpaceMobile, the market narrative is not one of established dominance but of future potential, reliant on executing ambitious technological roadmaps and managing significant cash burn. Their paths to success are fundamentally different from the one SpaceX has already paved.
| Company | Business Model | Current Valuation / Market Cap | Key Differentiator |
|---|---|---|---|
| SpaceX (Private) | Vertically integrated launch, satellite manufacturing, and internet services. | ~£160 billion (Reported valuation in secondary sale) | Reusable rockets, Starlink constellation, proven flight heritage. |
| Rocket Lab ($RKLB) | Small satellite launch services and manufacturing of space systems (satellite components). | ~£2.4 billion | Diversifying into an end-to-end space solutions provider beyond just launch. |
| AST SpaceMobile ($ASTS) | Pre-revenue development of a space-based cellular broadband network. | ~£1.9 billion | Technology designed to connect directly to standard, unmodified mobile phones. |
Rocket Lab’s Strategic Pivot
For Rocket Lab, the investment thesis has evolved significantly beyond its initial identity as a provider of small satellite launches with its Electron rocket. The company is strategically repositioning itself as an end-to-end space company, where its Space Systems division—producing satellite buses, components, and software—is becoming an increasingly important driver of revenue and, potentially, profitability. In the first quarter of 2024, Space Systems generated £50.1 million in revenue, substantially more than the £25.7 million from its Launch Services.2
This diversification is critical. While the Electron rocket has a strong track record, the small launch market is notoriously competitive. The company’s future is heavily tied to the development of its larger, reusable Neutron rocket, which aims to compete for more substantial government and commercial contracts.3 However, Neutron is a capital-intensive project with a first launch targeted for 2025 at the earliest. Until then, Rocket Lab remains unprofitable, posting a GAAP net loss of £34.3 million in its most recent quarter.2 Its success, therefore, depends not on riding SpaceX’s coattails but on disciplined execution of its diversification strategy and the timely delivery of Neutron.
AST SpaceMobile: A High-Stakes Wager
AST SpaceMobile operates in an entirely different paradigm. As a pre-revenue company, it represents a venture capital-style bet on a single, ambitious technological proposition: building a satellite network that can provide broadband directly to standard smartphones. The potential market is enormous, but the technical, regulatory, and financial hurdles are equally immense. The company’s value is derived almost entirely from its intellectual property and strategic partnerships with telecommunications giants like AT&T, Vodafone, and Google, who have provided both capital and validation.4
Unlike Rocket Lab, which has tangible revenue streams, AST SpaceMobile is burning cash to fund its research and the deployment of its initial block of BlueBird satellites. Its link to SpaceX’s valuation is perhaps the most tenuous of all. A generic “interest in space stocks” might provide temporary liquidity, but the company’s long-term fate rests squarely on its ability to demonstrate that its technology works at scale and to secure the considerable funding required to build out its full constellation. It is a binary play; it will either work spectacularly or fail completely.
Conclusion: The De-Risking Dividend
The argument that SpaceX’s soaring valuation is inherently bullish for its smaller peers is an oversimplification. While it elevates the profile of the entire space sector, it also casts a long shadow, making the operational and financial gaps seem even wider. For investors, the focus must remain on the distinct fundamentals of each company rather than on broad, thematic speculation.
A more insightful, contrarian takeaway might be to consider the second-order effects of SpaceX’s quasi-monopolistic position. As governments and large commercial entities become increasingly reliant on SpaceX for critical access to space, the strategic need to cultivate and fund a viable second-source provider becomes paramount. This desire to de-risk from a single point of potential failure—be it technical or geopolitical—could become the most significant tailwind for a company like Rocket Lab. This “de-risking dividend,” driven by national security and commercial prudence, is likely a far more potent and durable catalyst for value creation than the fleeting sentiment generated by another firm’s valuation milestone.
References
- Faris, G., & Butle, K. (2024, June 26). *SpaceX Is in Talks for Tender Offer That Would Value Company at About $200 Billion*. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2024-06-26/spacex-is-in-talks-for-tender-offer-valuing-company-at-200-billion
- Rocket Lab. (2024, May 6). *Rocket Lab Announces First Quarter 2024 Financial Results*. Rocket Lab USA. Retrieved from https://investors.rocketlabusa.com/news/news-details/2024/Rocket-Lab-Announces-First-Quarter-2024-Financial-Results/default.aspx
- Fox, M. (2024, May 22). *Rocket Lab stock soars to its highest level this year as the SpaceX rival plans to launch its Neutron rocket in 2025*. Investopedia. Retrieved from https://www.investopedia.com/spacex-rival-rocket-lab-stock-soars-to-all-time-high-with-launch-planned-for-2025-8744456
- AST SpaceMobile. (2024, April 17). *AST SpaceMobile Announces Strategic Investment from AT&T, Google and Vodafone*. AST SpaceMobile. Retrieved from https://investors.ast-science.com/news-releases/news-release-details/ast-spacemobile-announces-strategic-investment-att-google-and
- @mvcinvesting. (2024, June 26). [Post on SpaceX’s valuation and its impact on RKLB and ASTS]. Retrieved from https://x.com/mvcinvesting/status/1863739442520875361
