Nicholas Mugalli
Institutional TMT & Macro Research, AI/Semiconductors/Policy
AST SpaceMobile and Rocket Lab's drain after SpaceX listed is the proxy premium being refunded, as investors sell the substitutes to buy the original. Trading space as one basket is over: it is now platform versus shadow, and only names with real orders, backlog and execution get pulled up in SpaceX's wake while pure narrative vehicles keep bleeding. Longer term, a $3T SpaceX raises the ceiling for every real business in the sector; the drain is the short-term mechanic. x.comÂ
Rocket Lab still looks ridiculously expensive at 29 times forward sales against SpaceX at 22 times, even after a 65% fall. At 22 times, Rocket Lab would be roughly $38, and SpaceX would still be the pick. SpaceX also has better forward guidance; Rocket Lab's negative adjusted EBITDA makes sales multiples the valuation yardstick. x.com x.com x.com x.comÂ
SpaceX's competitive threat makes AST SpaceMobile less attractive at these levels than SpaceX and Rocket Lab. AST SpaceMobile's weekly chart shows a downtrend and strong outflows, though the stock is near marked support. x.comÂ
Investors rotating into cheaper stocks with more upside should ultimately benefit Rocket Lab and AST SpaceMobile. Both have already suffered major drawdowns. x.comÂ
AST SpaceMobile and Rocket Lab look more lucrative as shorts than semiconductors, given extreme sales multiples. Rocket Lab trades at 127x sales at $150, and AST SpaceMobile at 588x at $130 after already missing its Q1 revenue target. Both could rise another 30-50% first, making now or the week of June 22 the window to short, and still trade at $50-60 a share in 12-15 months. x.comÂ
Frequency Electronics now has faster projected three-year growth than Rocket Lab at a much lower forward sales multiple. It trades at 8x next-twelve-month sales for 34% growth, versus Rocket Lab at 25x for 31%, Microchip at 7x for 15%, and L3Harris at 2x for 7%. Nothing else in the space sector comes close except Redwire and Planet Labs, which have shown far less relative strength. x.comÂ
AST SpaceMobile's direct-to-phone satellite network makes it an extremely bullish long-term space-economy bet. Partnerships with more than 60 mobile operators representing over 3 billion potential subscribers and about $1.3 billion in contracted revenue backlog support the case. It targets initial, intermittent broadband coverage in five countries before end-2026; its market cap is roughly half Rocket Lab's, though both face significant execution risks. x.comÂ
AST SpaceMobile's latest quarter shows how far it remains from making money, a very different result from Rocket Lab's. Per @StockSavvyShay, AST's Q1 revenue was $15M versus $37M expected and EPS was -$0.66 versus -$0.20, with 2026 revenue guidance of $175M below estimates, though it holds $3.5B in cash and targets 45 satellites by end-2026. x.comÂ
AST SpaceMobile's 100-times-sales pricing made it a long-run short. Shorts at that valuation work 98 out of 100 times. x.comÂ
Rocket Lab completing its $1.94 billion ATM to fund the Iridium deal removes an overhang that likely suppressed the whole space sector. As the lead high-beta space name, its ATM selling in a thin, risk-off market was magnified by algos into AST SpaceMobile and peers; that pressure should now ease. After nearly four months of losses from the SpaceX IPO, macro risk-off, low summer liquidity and share sales, a base is starting to form. Delays or macro risk could still weigh. x.com x.com x.comÂ
Rocket Lab is still expensive at 30x next year's sales even after falling 60%. x.comÂ