3 Space Stocks to Buy in October

Rocket Lab, Intuitive Machines and Karman Holdings are positioned as differentiated ways to gain exposure to expanding space infrastructure and defense demand, though Rocket Lab and Intuitive Machines remain unprofitable. Intuitive Machines' Q2 2026 revenue surged 310% year over year to $206.2 million, with acquired Lanteris contributing $166.7 million, or 81% of sales. Karman, profitable since 2023, increased Q2 net income about 106% to $14 million and holds a $1.3 billion record backlog, but trades at an elevated 127x P/E; Rocket Lab's backlog is $2.36 billion and its product segment represented roughly 78% of Q3 2026 revenue.

Analysis

The investable distinction is not “space” exposure but earnings quality: KRMN monetizes defense/launch demand at the component level, where qualification cycles and switching costs can support margins even if individual launch providers slip schedules. RKLB has the better strategic optionality because its components business can compound independently of launch cadence, but the equity remains exposed to a costly transition from proven small-launch economics to Neutron development spending. LUNR’s reported growth should be treated largely as acquired revenue until management discloses Lanteris organic growth, program-level margins, working-capital needs, and backlog conversion.

Near term (days to 1-3 months), this promotional coverage is unlikely to be a durable catalyst; the material re-rating triggers are contract awards, backlog-to-revenue conversion, and gross-margin guidance rather than headline revenue. For RKLB, Neutron schedule/capex updates are the critical binary: a delay can extend cash burn and compress the “platform” multiple, while a credible customer commitment or on-time hardware milestone would validate launch optionality. For LUNR, integration costs, customer concentration in national-security programs, and milestone-payment timing can make reported quarterly revenue highly volatile despite the larger revenue base.

KRMN’s profitability does not eliminate risk: at a triple-digit earnings multiple, even modest execution misses or normalization in missile/space procurement can produce disproportionate multiple compression. The contrarian view is that the market may be overpaying for reported growth across the group while underpricing the scarcity value of qualified subsystem suppliers; however, that only holds if KRMN converts backlog at stable margins and avoids customer/program concentration. Verify the article’s chronology and company-reported figures before acting, as the cited reporting periods appear internally inconsistent.

Key Decisions for Investors

• Initiate a small long KRMN / short LUNR pair over a 3-6 month horizon only after confirming LUNR’s post-acquisition organic revenue and segment margins. Thesis: KRMN has cash earnings and qualified-component exposure versus LUNR’s acquisition-driven top-line base; target 15-20% relative outperformance, exit if LUNR demonstrates positive adjusted EBITDA plus sustained organic backlog growth or if KRMN guides to margin erosion.
• Accumulate RKLB on Neutron-development selloffs rather than chase momentum, sized as a 6-18 month venture-style public-equity position. Add only if cash runway covers planned capex without a near-term dilutive raise; take risk down on a material Neutron schedule slip or a quarterly increase in cash burn not matched by backlog growth.
• Do not establish a standalone KRMN long at the current earnings multiple without a pullback or evidence of upward EPS revisions. A more attractive entry is after earnings if backlog conversion and gross margin support FY27 consensus; downside risk is 25%+ if valuation de-rates toward aerospace/defense supplier peers.
• Set an event alert for RKLB launch/Neutron milestones and LUNR national-security contract disclosures over the next two quarters. These are more actionable than aggregate sector sentiment; missed milestones should favor reducing RKLB/LUNR exposure before balance-sheet pressure becomes the market focus.