Why Rocket Lab Represents Today's Best Play in Tomorrow's $1.8 Trillion Space Economy

Key Points

• The space economy is on track to balloon from $613 billion today to $1.8 trillion by 2035, according to McKinsey projections
• Rocket Lab’s Neutron medium-lift vehicle will dramatically expand its addressable market, enabling competition for high-value government and commercial contracts
• The company’s space systems division generates superior margins and serves as a comprehensive solution provider across the entire mission spectrum
• A $1.1 billion backlog positions Rocket Lab to capitalize on sustained demand in satellite deployment and space infrastructure

The Space Industry’s Explosive Growth Creating Tailwinds for Rocket Lab

The commercial space sector has reached an inflection point. With a current market value near $613 billion, industry forecasters predict the space economy will triple within the next decade, hitting $1.8 trillion by 2035. This isn’t mere speculation—it’s driven by tangible demand: governments investing heavily in real-time Earth observation, enterprises pursuing global connectivity infrastructure, and defense agencies modernizing their space capabilities.

For investors seeking exposure to this secular trend, Rocket Lab (NASDAQ: RKLB) stands out as a differentiated play. The company has strategically positioned itself not merely as a launch provider, but as an integrated space ecosystem player capable of shepherding missions from conception through in-orbit operations.

Neutron: The Catalyst for Revenue Expansion

Rocket Lab made its initial mark with Electron, the small-lift launch vehicle that has secured the company’s position as America’s second-largest space launch operator. However, Electron’s payload capacity—capped at 300 kg to low Earth orbit—limits it to a narrow market segment.

The coming Neutron platform changes this calculus entirely. By delivering 13,000 kg to low Earth orbit, Neutron enables Rocket Lab to directly compete for the lucrative mid-lift market currently dominated by SpaceX’s Falcon 9. This capacity jump unlocks access to higher-margin government contracts and premium commercial missions that were previously out of reach.

The development timeline has warranted investor patience. Initially targeted for launch by year-end, Rocket Lab recalibrated expectations to Q1 2026—a decision market analysts largely embraced. Morgan Stanley deemed the adjustment “more measured than anticipated,” while Stifel credited the company for “prioritizing successful execution over aggressive timelines.” Post-launch, the company plans to complete three operational missions within twelve months, demonstrating rapid deployment capability.

Space Systems: The Profitability Engine

While launch services grab headlines, Rocket Lab’s space systems segment represents the company’s most important strategic asset. Through September 30, this division generated $299.6 million in revenue against $93.8 million in gross profit—handily outpacing the launch services segment’s $123 million revenue and $45.1 million in gross profit.

Under CEO Peter Beck’s vision, Rocket Lab functions as an end-to-end provider: designing and manufacturing spacecraft for missions ranging from low Earth orbit to deep space, producing aerospace components for government contractors and defense primes, and delivering comprehensive program management and mission operations support.

This vertical integration strategy is particularly evident in Rocket Lab’s contracted role as prime supplier for the Space Development Agency’s Proliferated Warfighter Space Architecture, where the company develops satellite constellations engineered for resilient military communications in contested environments.

The Backlog: Tangible Evidence of Durable Demand

Perhaps the most compelling metric is Rocket Lab’s contracted backlog: $1.1 billion as of September 30. Representing signed, undelivered contracts for both launch and spacecraft services, this backlog provides high-visibility revenue visibility—roughly 47% attributable to launch activities, with the remainder split across space systems work.

This substantial pipeline reflects sustained appetite for Rocket Lab’s capabilities amid the space industry’s transformation. The convergence of government modernization spending, commercial satellite deployment acceleration, and the company’s technological differentiation creates a favorable trajectory extending well beyond today into tomorrow’s opportunities.

For growth-oriented investors, the timing presents a compelling entry point into a company positioned at the nexus of multiple multiyear structural trends in space infrastructure.