Could Buying RKLB Before the SpaceX IPO Set You Up for Life?
Written by Leo Sun for The Motley Fool -> Rocket Lab is growing faster and trading at a more reasonable valuation. SpaceX will likely become the biggest IPO in history when it goes public on June 12. But at its target valuation of $2 trillion, it would be valued at 107 times la
Rocket Lab is growing faster and trading at a more reasonable valuation.
SpaceX will likely become the biggest IPO in history when it goes public on June 12. But at its target valuation of $2 trillion, it would be valued at 107 times last year's sales. That's a bubbly valuation, even for a company that grew its revenue by 33% in 2025.
SpaceX also still generates most of its revenue from Starlink, its satellite internet service. Starlink is profitable, but the losses from SpaceX's space division, which produces its Falcon rockets, and its AI division, which owns xAI and X, are completely erasing those gains.
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Before SpaceX integrated xAI into its business in May, the company was profitable because it offset the space division's moderate losses with Starlink's rising profits. However, the integration of xAI -- which posted an operating loss of $6.4 billion in 2025 -- upset that balance.
That's why SpaceX posted a net loss of $4.3 billion in the first quarter of 2026 on just $4.7 billion in revenue. That's also probably why it's so eager to raise more cash and why it allocated up to 30% of its shares to retail investors rather than institutional investors. Those red flags are preventing me from placing an order for its IPO, which is already two times oversubscribed.
Instead of chasing SpaceX's volatile market debut, it might be smarter to simply invest in Rocket Lab (NASDAQ: RKLB) -- which also produces reusable orbital rockets but is growing faster, trading at a more reasonable valuation, and doesn't own a cash-burning AI business. Let's see why this smaller rocket stock could be a much better long-term buy than SpaceX.
Rocket Lab competes against SpaceX's space division. It's already launched its Electron rocket, which carries smaller payloads than SpaceX's Falcon rockets, 88 times. It plans to launch its new Neutron rocket, which carries heavier payloads than the Electron, by the end of this year.
