Key Points

• Space company Rocket Lab has been described as a mini-Space Exploration Technologies.

• But lately, investors have been selling Rocket Lab stock and buying the real SpaceX stock instead.

• Rocket Lab made a smart buy of Iridium this summer, but SpaceX is still the best space company in the world.

• These 10 stocks could mint the next wave of millionaires ›

From a share price just under $65 at the end of July to an intraday high north of $86 mid-month to... just over $64 at the end of August, Rocket Lab (NASDAQ: RKLB) stock went full circle last month. Eventually, the stock ended up not just back where it started but actually a bit below. Investors seem to have cooled to the idea that Rocket Lab might become "the next SpaceX."

Meanwhile, Space Exploration Technologies (NASDAQ: SPCX) stock is up 30% in August.

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Should you ignore Rocket Lab?

Why do investors seem to be ignoring Rocket Lab? Why are they flocking to SpaceX stock instead -- and are they right to do so? Because it's not as if Rocket Lab has been reporting bad news lately.

On Aug. 20, Rocket Lab announced its 93rd successful Electron rocket launch, delivering an Earth-imaging satellite to orbit for longtime customer Institute for Q-shu Pioneers of Space. (iQPS). With 14 launches so far this year, Rocket Lab's on pace to at least match last year's record of 21 launches by the end of this year -- and possibly surpass it.

On Aug. 18, the U.S. Space Force picked Rocket Lab to join its Space Data Network Consortium, awarding the company $12 million to work on the Space Data Network Backbone (SDN-B), a "secure, high-speed global satellite communications network for military operations."

Just one day earlier, on Aug. 17, Space Force also drafted Rocket Lab to work on its NITE-STAR program, a $981 million umbrella contract "to support a distributed test and training architecture to help prepare [Space Force officers] for contested scenarios."

And of course, there's the transformative deal Rocket Lab announced in June. Buying Iridium Communications (NASDAQ: IRDM) for $8 billion -- just 20% of its own market capitalization -- Rocket Lab immediately straightened its path to profitability, and prepared to leapfrog other unprofitable space stocks to become both generally accepted accounting principles (GAAP) profitable and free cash flow positive as early as next year.

With successes like these, why would anyone prefer to own SpaceX?

Why you might prefer to own SpaceX over Rocket Lab

Not to put too fine a point on it, but the primary reason investors might prefer SpaceX stock over Rocket Lab is that SpaceX is light-years ahead of Rocket Lab (and everyone else) in space tech.

Rocket Lab may have launched 93 rockets in its lifetime, for example, but SpaceX launched nearly twice that -- 165 rockets -- in 2025 alone. What's more, Rocket Lab's launches currently max out at 300 kilograms of payload to orbit with the expendable Electron rocket -- versus SpaceX's payload of 22,800 kilograms with the reusable Falcon 9.

Rocket Lab is working on a bigger, reusable rocket of its own, the Neutron medium-lift vehicle. It was supposed to conduct its inaugural launch in 2025, however, and be in regular rotation this year -- but 2026 is three-quarters over, and Neutron has yet to leave the launchpad even once.

Meanwhile, SpaceX has conducted 13 test flights of its next-generation launch vehicle, the reusable Starship -- and targets 10,000 launches per year within a few years of Starship being certified for flight.

We're aiming to reach 30+ Starship launches/day in 2030, which is ~10k annualized.

-- Elon Musk (@elonmusk) Aug. 21, 2026
Still tiny numbers compared to airplane flights!

With a 100-ton-plus payload to low earth orbit and a launch cost measured in single-digit millions, Starship promises to outclass every other family of rocket launchers on the planet, Rocket Lab's Neutron included, on payload, launch frequency -- and price.

Reasons galore

And that's just one aspect of SpaceX's space business. There's also Starlink, the company's satellite communications powerhouse and likely profits driver for SpaceX in future years. Starshield, the militarized version of Starlink. And the Human Landing System, the rocketship that will return astronauts to the moon in 2028. And Terafab. And orbital data centers.

Mind you, I still have my reservations about the decision to merge SpaceX's superior space businesses with the cash-burning AI businesses of Grok and X. Elon Musk may believe AI is a $26.5 trillion opportunity, but if I were ever to invest in SpaceX, it would be for the business that gave SpaceX its name: space.

Until Rocket Lab (or anyone, really) proves it's able to match SpaceX's achievements not just in one or two of the categories SpaceX created, but to juggle all of them successfully and simultaneously, it's inarguable that SpaceX will remain the single best space company on Earth.

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Rich Smith has positions in Rocket Lab. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.