Volatility was rampant among space stocks on Tuesday. Shares of moon researcher Intuitive machines (NASDAQ: LUNR) rose 35.6% through 3 p.m. ET, but rocket maker Rocket Lab (NASDAQ: RKLB) and satellite communications specialist AST SpaceMobile (NASDAQ: ASTS) decreased by 6.2% and 12.3% respectively.
AST’s decline comes after the FCC gave permission World star (NYSE: GSAT) to operate 17 new cell-to-cell satellites that could compete with AST. The FCC also extended Globalstar’s operating license through 2039.
Rocket Lab and AST: Ready for Launch
Momentum traders flocked to Rocket Lab and AST SpaceMobile in August, anticipating the launch of high-profile space missions that were about to take place. Shares of Rocket Lab have risen as much as 40% since Aug. 1, after the twin “EscaPADE” spacecraft were brought to Cape Canaveral for a mission to Mars.
AST SpaceMobile shares are up nearly as much — 30% since Aug. 1 — after delivering five satellites to the Cape for launch in September. Success should move the company closer to offering satellite-based cell phone communications in the United States and eventually the world. Competition from Globalstar, however, could limit AST’s growth prospects.
Intuitive machines: taking rovers to the moon
Further into the future, Intuitive Machines is scheduled to launch its IM-2 mission to the moon in late 2024 or early 2025. SpaceNews reports that Intuitive may also bid for a NASA contract to replace Astrobotic Technology on its “VIPER” mission (Volatiles Investigating Polar Exploration Rover). The goal is to place a rover on the moon to search for ice near the south pole.
There would still be $84 million left of VIPER’s $433.5 million budget, twice what Intuitive Machines booked in the entire second quarter. That gives Intuitive Machines a strong reason to bid for the work.
Should You Buy Aerospace Stocks?
Here’s what you really need to know about these three aerospace stocks. They’re growth stocks, yes, with strong prospects and even stronger revenue growth. They’re also momentum stocks, valued more on headlines than earnings. The Fly reports “unusually active” options trading on at least two of the three in recent days.
But S&P Global Market Intelligence says Intuitive Machines won’t be profitable before 2026, and Rocket Lab and AST won’t be profitable before 2027. Take note, investor.
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Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.
Why Intuitive Machines Became Hot, But Rocket Lab and AST SpaceMobile Shares Dropped Today was originally published by The Motley Fool
