U.S. stocks have struggled mightily in 2025. Thanks to President Donald Trump's protectionist policies, lingering inflation, and sticky interest rates, the benchmark S&P 500 has lost 7.6% of its value year to date at the time of this writing. Savvy investors, however, recognize that such sharp corrections often unveil rare opportunities to acquire high-quality companies at discounted prices -- particularly those in innovative industries poised to thrive regardless of broader economic headwinds.

Amid the market turbulence, two space technology pioneers, Rocket Lab USA (RKLB 10.14%) and Intuitive Machines (LUNR 0.65%), have emerged as particularly compelling candidates for growth-focused portfolios. Both companies have seen their shares decline precipitously this year, with Rocket Lab down 25% and Intuitive Machines plummeting 57% since the start of the year, creating potentially attractive entry points for investors with longer time horizons and appropriate risk tolerance.

Which of these innovative space stocks represents the better investment opportunity at current valuations? To answer this question, let's examine each company's business model, growth trajectory, addressable market, and key risk factors to determine which offers the more favorable risk-reward proposition for investors seeking exposure to the rapidly expanding commercial space economy.

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The case for Rocket Lab USA

Founded in 2006, Rocket Lab has transformed from a small rocket start-up into a comprehensive space technology powerhouse. The company's Electron rocket has become America's second most frequently launched orbital vehicle, while Rocket Lab has strategically expanded into spacecraft manufacturing, satellite components, and integrated space systems. Despite losing a quarter of its value so far this year, Rocket Lab's fundamentals continue to strengthen as the company solidifies its market position between smaller launch providers and industry giant SpaceX.

With a current market capitalization of approximately $8.6 billion, Rocket Lab is targeting a massive commercial opportunity that justifies long-term investor enthusiasm. The global satellite launch market alone is projected to grow at over 16% annually through 2029, representing tens of billions in potential revenue. When factoring in spacecraft components, satellite systems, and space services, Rocket Lab's total addressable market expands to potentially hundreds of billions annually, creating a substantial growth runway in the decades ahead.

Recent financial results demonstrate Rocket Lab's execution capabilities, with Q4 2024 revenue surging 121% year over year to $132.4 million. More importantly, the company's backlog has swelled to a whopping $1.07 billion. This growing pipeline provides exceptional visibility into future earnings and demonstrates strong commercial demand for Rocket Lab's expanding capabilities across both launch services and space systems.

The most compelling near-term catalyst for Rocket Lab investors is the upcoming debut of the Neutron rocket, scheduled for the second half of 2025. This medium-lift launch vehicle represents a quantum leap in capability, with a payload capacity 60 times greater than the current Electron rocket.

Neutron will enable Rocket Lab to compete directly with SpaceX for lucrative medium-sized payload contracts, potentially generating more than six times the revenue per mission that Electron currently earns. This dramatic expansion in launch capabilities could accelerate Rocket Lab's path to profitability while opening entirely new market segments for the company.

The case for Intuitive Machines

Houston-based Intuitive Machines focuses exclusively on lunar exploration. The company made history in February 2024 by landing its Nova-C spacecraft on the moon, becoming the first American vehicle to touch lunar soil since Apollo 17 in 1972. A second mission reached the lunar surface in March 2025, further validating the company's technology platform despite encountering technical challenges when the lander tipped over after touchdown.

At a current market capitalization of just $894 million, Intuitive Machines presents investors with a compelling lunar opportunity at a fraction of Rocket Lab's valuation. This modest market cap appears particularly intriguing when contrasted with the company's addressable market.

NASA's Artemis program alone has committed over $93 billion to return humans to the moon, with Intuitive Machines positioned as a key commercial partner through multiple contracts. The company secured a potentially transformative NASA Near Space Network contract valued at up to $4.82 billion, which will provide communications and navigation services for spacecraft operating in lunar orbit and on the moon's surface.

This Near Space Network initiative is crucial for NASA's Artemis program as it will establish the communications infrastructure needed for long-term lunar operations. The contract calls for Intuitive Machines to deploy a constellation of relay satellites around the moon that will transmit data, provide navigation services, and enable communications for both robotic missions and, eventually, human explorers.

This is particularly valuable because Intuitive Machines has secured multiple roles in NASA's lunar strategy. Beyond the communications contract, the company has won several missions under NASA's Commercial Lunar Payload Services (CLPS) program, which provides transportation services to deliver scientific instruments and technology demonstrations to the lunar surface. These CLPS contracts serve as pathfinders for the Artemis program, collecting critical data that will inform human missions.

Intuitive Machines plans to leverage its regular cadence of lunar delivery missions to gradually deploy its communications satellite constellation, creating a complete lunar communications and navigation network by the late 2020s. This strategy provides the company with near-term revenue while building toward potentially larger, sustained income as lunar activities expand.

What's in store for the lunar pioneer this year? Intuitive Machine's management projects 2025 revenue of between $250 million and $300 million, with analysts forecasting annual earnings growth potentially exceeding 94%. This exceptional growth outlook creates a potentially attractive risk-reward proposition for investors willing to embrace the inherent volatility of lunar exploration and the company's heavy dependence on government contracts.

Which stock is the better buy?

In this head-to-head matchup, Rocket Lab emerges as the more attractive space play for growth-oriented investors. Its diversified business provides more stable revenue and greater resilience to setbacks.

Moreover, the upcoming Neutron rocket offers a clear catalyst for accelerated growth, while its established operational history builds confidence in execution capabilities despite the inherent challenges of the space industry.