2 Space Stocks to Buy in July (Hint: Not SpaceX)

SpaceX’s record-setting IPO (nearly $86B raised) leaves the stock likely to be volatile around the staggered lockup expiry, with an extremely high valuation (P/S 115). In contrast, Rocket Lab is up >50% this year and announced an agreement to acquire Iridium Communications, while Redwire is up 65% in 2026 and reported defense revenue jumping to $44.3M in Q1 vs $9.2M prior year. The article argues Rocket Lab (P/S 85.5) and Redwire (P/S 5) may offer similar space/defense exposure with less valuation risk than SpaceX.

Analysis

The cleanest mechanism here is not “space is hot,” but that capital is rotating toward assets with operating history while the newly listed flagship absorbs valuation air. In that setup, RKLB and RDW can outperform even if the broader theme cools, because both are easier for institutions to underwrite than a name priced for flawless execution; however, RKLB is now expensive enough that any slip in Neutron timing or M&A integration could trigger multiple compression faster than revenue growth can catch up.

RDW is the more interesting second-order beneficiary because defense space spending is contract-backed and slower to re-rate on hype, which lowers drawdown risk relative to launch pure-plays. The key caveat is that selection onto a contract vehicle is not the same as booked revenue; the market will likely need evidence of award conversion and margin expansion before it assigns a durable premium. If that conversion stalls, RDW can give back a large part of the recent move even if the sector remains bid.

The Iridium angle is more about optionality and structure than simple growth. If the deal is real and financed efficiently, the market may reward the combined asset base; if it is stock-heavy or delayed by approvals, the acquirer/target spread can widen quickly and the transaction itself becomes a source of volatility rather than synergy. The contrarian read is that the consensus is underestimating how much of the “space” trade depends on capital markets enthusiasm, not fundamentals; if rates back up or a launch/program delay hits, the weakest balance sheets and richest multiples should de-rate first.

Key Decisions for Investors

• Prefer a relative-value long RDW / short RKLB pair for 1-3 months: RDW has cheaper valuation support and more direct defense budget linkage, while RKLB already discounts a lot of Neutron and M&A success; cover if RKLB converts the acquisition into clear margin accretion or raises guidance.
• Buy RKLB only on a post-announcement pullback, not strength; use a 6-12 month horizon and require confirmation that the deal is funded without excessive dilution. If financing terms are stock-heavy, fade the rally.
• For event-driven exposure, watch IRDM as a merger-arb/volatility name rather than a core long. Long IRDM is only attractive if the market offers a meaningful discount to implied deal value; otherwise the better trade may be to wait for spread dislocation or avoid it entirely.
• Avoid chasing the newly listed space flagship at current valuation; if borrow/options exist, the cleaner expression is a tactical short or put-spread into lockup-related supply, with a tight stop if post-IPO demand absorbs selling over the next 1-2 months.