Alones Creative
Shares of Rocket Lab (NASDAQ:RKLB) are climbing as tensions between President Trump and SpaceX (SPACE) CEO Elon Musk spark speculation that some lucrative government space contracts could be up for grabs.
Elon Musk’s entrenched relationship with NASA, and by extension, the U.S. government, involves a multitude of government contracts, the most lucrative is NASA’s use of the SpaceX (SPACE) Falcon 9 rocket to bring astronauts to the International Space Station. There’s also another $4B allocated towards future missions to the moon, and $843M to deorbit the ISS in 2030.
Without any competitors able to match SpaceX (SPACE) orbit or payload capabilities, NASA remains at Musk’s mercy until alternatives can be developed.
But as for U.S. defense and intelligence payloads launched into low earth orbit (“LEO”), the government has other options.
With 66 launches under its belt, Rocket Labs’ (NASDAQ:RKLB) Electron rocket is a reliable vehicle for government and commercial customers. The Electron was designed to place small satellites into LEO and was recently awarded a $5.6B contract for National Security Space Launch to deliver payloads into orbit.
The company was also selected to participate in a $46B Air Force Eglin Wide Agile Acquisition (“EWAAC”) defense contract, and $515M to build 18 satellites for the Space Development Agency.
But while Rocket Lab’s (NASDAQ:RKLB) Electron may not stack up to SpaceX’s (SPACE) Falcon 9, its next-gen Neutron rocket is aiming for the same launch contracts—with a more budget-friendly pitch.
Neutron can’t carry the same payload as Falcon 9 (14 tons vs 22 tons), but a Neutron launch costs ~$50M vs $70M for Falcon 9, offering an attractive alternative for modest-sized payloads. Additionally, Neutron will eventually be capable for deep space missions and human spaceflight, pitting it directly with SpaceX for those sought-after NASA/ISS launches.
The Neutron rocket is expected to become operational with its first launch scheduled for the second half of 2025.