Rocket Lab and AST SpaceMobile: Diversifying the Sky Amid the Musk-Trump Space Feud

The escalating feud between Elon Musk and Donald Trump has exposed a critical vulnerability in U.S. space strategy: an overreliance on SpaceX for national security, exploration, and commercial launches. With SpaceX holding nearly $30 billion in government contracts—from Pentagon satellites to NASA's Artemis program—this concentration of power has become a geopolitical flashpoint. The fallout has created an opening for smaller aerospace firms with proven NASA ties and disruptive technologies to step into the spotlight. Among them, Rocket Lab (NASDAQ:RKLB) and AST SpaceMobile (NASDAQ:ASTS) stand out as strategic plays for investors seeking to capitalize on this shift toward diversification.

Why the Feud Matters for Investors

The Musk-Trump clash has reignited debates about the risks of monopolizing space infrastructure. SpaceX's dominance—90% of U.S. military launches in 2024—has left the government vulnerable to disruptions caused by political tensions or technical failures. This has spurred policymakers to accelerate efforts to decentralize the space industry. For investors, this means two opportunities:
1. Contract Diversification: Companies with existing government partnerships are poised to capture a share of the $175 billion "Golden Dome" missile defense initiative and other Pentagon programs.
2. Technological Differentiation: Firms offering unique capabilities, such as Rocket Lab's reusable rockets or AST's direct-to-smartphone satellite broadband, can carve out niches in a crowded market.

Rocket Lab: The Agile Rocketeer

Rocket Lab has quietly become a critical player in the U.S. space ecosystem. Its Electron small-lift rocket and upcoming Neutron medium-lift rocket provide cost-effective alternatives to SpaceX's Falcon 9. Key advantages include:
- NASA Partnerships: Rocket Lab is contracted to launch NASA's Aspera satellite in June 2025, part of its Pioneers Program. The company also aims to join the National Security Space Launch (NSSL) program by 2025, securing access to a $5.6 billion defense contract.
- Launch Cadence: Rocket Lab's Electron rockets have a 15-minute turnaround between missions, enabling rapid deployment of satellites. Its June 10 mission, “The Mountain God Guards,” will launch a synthetic aperture radar satellite for Japan's iQPS, marking its third launch in 24 days.
- Neutron's Potential: The reusable Neutron rocket (first launch expected Q4 2025) can carry 13 metric tons to low Earth orbit, ideal for deploying satellite constellations. With a multi-launch agreement for a commercial constellation starting in 2026, Rocket Lab is positioning itself to rival SpaceX's Starlink dominance.

Rocket Lab's stock has surged 7% year-to-date, reflecting investor optimism. However, its $2.3 billion market cap remains modest compared to SpaceX's $100+ billion valuation, leaving room for upside if Neutron's first flight succeeds.

AST SpaceMobile: Bridging the Satellite-Phone Divide

AST SpaceMobile is pioneering direct-to-smartphone (D2C) satellite broadband, eliminating the need for specialized hardware. Its Block 2 BlueBird satellites (launching via India's GSLV and SpaceX's Falcon 9 in 2025) will provide 120 Mbps speeds to unmodified smartphones, targeting rural markets and defense applications. Key points:
- Strategic Partnerships: AST has secured agreements with telecom giants AT&T and Verizon for beta services by late 2025. Its collaboration with Blue Origin (up to 45 launches planned) reduces reliance on SpaceX.
- Geopolitical Relevance: D2C technology could support the Golden Dome program by enabling secure, global communication for military personnel. AST's $500 million equity program ensures funding for rapid deployment.
- Market Potential: With 3.7 billion people lacking internet access, AST's service addresses a $320 billion opportunity.

Despite a 17% stock gain since January, AST's valuation remains speculative. Execution risks—cybersecurity flaws, regulatory hurdles, and costly satellite failures—could test its progress.

The Bigger Picture: Diversification Pays

The Musk-Trump feud underscores a broader industry shift: governments and investors are demanding redundancy in space infrastructure. Rocket Lab and AST are beneficiaries of this trend:
- Rocket Lab leverages its agility and government ties to capture niche markets. Its Neutron rocket could become the go-to for medium-lift launches by 2027.
- AST SpaceMobile is betting on D2C's disruptive potential. Success hinges on proving its technology's reliability and securing partnerships with global telecom leaders.

For investors, these stocks offer exposure to a nascent theme: geopolitical diversification in aerospace. While SpaceX's dominance is unlikely to fade soon, Rocket Lab and AST represent leveraged plays on a structural shift toward reducing reliance on any single player.

Risks to Consider

• Execution Risks: Rocket Lab's Neutron and AST's D2C service face technical hurdles. A failed launch or cybersecurity breach could derail momentum.
• Regulatory Delays: Satellite constellations require approvals from global agencies, which can slow timelines.
• Market Competition: SpaceX's Starlink and Amazon's Project Kuiper are entrenched competitors with deeper pockets.

The Bottom Line

The Musk-Trump feud has turned aerospace into a geopolitical chessboard. Rocket Lab and AST SpaceMobile are two small players with big ambitions to disrupt the status quo. For investors willing to accept risk, now is a pivotal moment to allocate 1-3% of a tech portfolio to these stocks. Rocket Lab's near-term catalysts (Neutron's first flight, NSSL certification) and AST's beta launch timelines make them timely bets on a trend that's only just taken off.

The sky is no longer Musk's alone to own.