We just covered Avoid SpaceX and Buy These 11 Stocks Instead. Rocket Lab (NASDAQ:RKLB) ranks #10 (see Avoid SpaceX and Buy These 5 Stocks Instead).
Number of Hedge Fund Investors: 43
Before SpaceX IPO’d, Rocket Lab (NASDAQ:RKLB) was one of the top space infrastructure plays. But when SpaceX went public at a $2 trillion valuation, investors said, “Why buy the proxy when I can own the real thing? The stock is down about 30% over the past month. But Redditors believe the business fundamentals didn’t get worse. The company still has all its contracts, all its backlog, and all its growth prospects. The selloff was pure capital reallocation, not deteriorating business performance.
Rocket Lab (NASDAQ:RKLB) operates multiple rocket systems. Their main workhorse is the Electron rocket, which launches small payloads into orbit. Clients include government agencies, defense contractors, and commercial satellite operators who need to get their satellites into space.
Neutron is Rocket Lab’s (NASDAQ:RKLB) next-generation mega rocket, which is under development. Management expects Neutron to launch sometime in 2027. But here’s why investors care: each Neutron launch is expected to generate $50 to $55 million in revenue. That’s massive compared to what Electron brings in. If Rocket Lab can launch Neutron 20 times per year, that’s $1.0 to $1.1 billion annually, just from Neutron. That’s almost double their entire 2025 revenue projection of $602 million.
Polen 5Perspectives Small Mid Growth Strategy stated the following regarding Rocket Lab Corporation (NASDAQ:RKLB) in its fourth quarter 2025 investor letter:
“Rocket Lab Corporation (NASDAQ:RKLB) is an end-to-end space company which engages in the development of rocket launch and control systems for the space and defense industries. The company operates in two primary segments: Launch Services and Space Systems. Launch Services provides rides into orbit for small satellites with their Electron rocket. Space Systems designs and manufactures spacecraft components, satellite buses, and offers mission operations and other space solutions. The stock was up nearly 50% in the quarter on a strong set of earnings results and a growing backlog. While we initiated …(Click Here to Read the Letter in Detail).”
While we acknowledge the risk and potential of RKLB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RKLB and that has 10,000% upside potential, check out our report about the cheapest AI stock.
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