Better Growth Stock: Rocket Lab USA vs. Intuitive Machines

George Budwell, The Motley Fool

Wed, Apr 16, 2025, 4:00 AM 6 min read

U.S. stocks have struggled mightily in 2025. Thanks to President Donald Trump's protectionist policies, lingering inflation, and sticky interest rates, the benchmark S&P 500 has lost 7.6% of its value year to date at the time of this writing. Savvy investors, however, recognize that such sharp corrections often unveil rare opportunities to acquire high-quality companies at discounted prices -- particularly those in innovative industries poised to thrive regardless of broader economic headwinds.

Amid the market turbulence, two space technology pioneers, Rocket Lab USA (NASDAQ: RKLB) and Intuitive Machines (NASDAQ: LUNR), have emerged as particularly compelling candidates for growth-focused portfolios. Both companies have seen their shares decline precipitously this year, with Rocket Lab down 25% and Intuitive Machines plummeting 57% since the start of the year, creating potentially attractive entry points for investors with longer time horizons and appropriate risk tolerance.

Which of these innovative space stocks represents the better investment opportunity at current valuations? To answer this question, let's examine each company's business model, growth trajectory, addressable market, and key risk factors to determine which offers the more favorable risk-reward proposition for investors seeking exposure to the rapidly expanding commercial space economy.

Founded in 2006, Rocket Lab has transformed from a small rocket start-up into a comprehensive space technology powerhouse. The company's Electron rocket has become America's second most frequently launched orbital vehicle, while Rocket Lab has strategically expanded into spacecraft manufacturing, satellite components, and integrated space systems. Despite losing a quarter of its value so far this year, Rocket Lab's fundamentals continue to strengthen as the company solidifies its market position between smaller launch providers and industry giant SpaceX.

With a current market capitalization of approximately $8.6 billion, Rocket Lab is targeting a massive commercial opportunity that justifies long-term investor enthusiasm. The global satellite launch market alone is projected to grow at over 16% annually through 2029, representing tens of billions in potential revenue. When factoring in spacecraft components, satellite systems, and space services, Rocket Lab's total addressable market expands to potentially hundreds of billions annually, creating a substantial growth runway in the decades ahead.

Recent financial results demonstrate Rocket Lab's execution capabilities, with Q4 2024 revenue surging 121% year over year to $132.4 million. More importantly, the company's backlog has swelled to a whopping $1.07 billion. This growing pipeline provides exceptional visibility into future earnings and demonstrates strong commercial demand for Rocket Lab's expanding capabilities across both launch services and space systems.