ASTS offers “damn compelling” direct-to-cell potential, but Feroldi warned that “50 things” could go wrong before commercialization.

  • Feroldi ranked SPCX first, RKLB second and ASTS a “distant third,” suggesting a 75%-25% split favoring RKLB.
  • Feroldi praised Rocket Lab CEO Peter Beck as “a five, hands down,” but said “it all comes down to Neutron.”
  • Feroldi said ASTS could eventually hit a $100 billion-$200 billion valuation, while SPCX remains the space race’s “top dog.”

Bestselling investing author Brian Feroldi prefers Rocket Lab (RKLB) over AST SpaceMobile (ASTS), calling both speculative “lottery tickets” but arguing Rocket Lab is further along and offers “better odds.”

RKLB Gets The Edge Over ASTS 

Feroldi, author of Why Does the Stock Market Go Up? and founder of Long Term Mindset, firmly favored Rocket Lab. “If you’re choosing versus Rocket Lab, definitely Rocket Lab,” he said, suggesting a hypothetical 75%-25% allocation in favor of RKLB.

“It’s a price-to-lottery-ticket,” he said. “This lottery ticket looks to me like it has better odds than the other lottery ticket because it’s further along.” Rocket Lab operates the flight-proven Electron rocket, manufactures spacecraft and components, owns launch infrastructure and serves commercial and government customers. Electron completed its 94th mission on Wednesday, deploying another Synspective Earth-imaging satellite.

The company reported record second-quarter (Q2) revenue of $234 million, up 62% year-over-year, and has secured major defense opportunities, including the Space Force’s $981 million-ceiling NITE-STAR vehicle, a $266 million HASTE contract and a $397 million satellite build-launch-operate award.

Feroldi also praised CEO Peter Beck as “a five, hands down” and “a very impressive individual.” 

Neutron Remains RKLB’s Biggest Test

Neutron, Rocket Lab’s larger reusable rocket under development, is both its biggest catalyst and its greatest risk. “It all comes down to Neutron,” Feroldi said. His reverse-DCF analysis suggested Rocket Lab must grow revenue by 46% annually over the next decade to justify its current valuation, assuming a 15% long-term free-cash-flow margin. 

Beck has said the window for a year-end debut is narrowing, with integrated testing, a wet dress rehearsal and a first-stage static fire still ahead. The first stage is targeted to reach Virginia in the fourth quarter.

Rocket Lab’s pending $8.1 billion enterprise-value acquisition of Iridium Communications could also reshape the business. Iridium generates $300 million in annual free cash flow, which could broadly offset Rocket Lab’s current losses. “That transaction might move this company to, let’s just call it, break-evenish,” Feroldi said, adding that it could “rocket” the company into a more mature phase while diversifying its revenue.

ASTS Offers ‘Damn Compelling’ Upside 

Feroldi called AST SpaceMobile’s plan to deliver broadband directly to ordinary phones without special hardware “damn compelling.” AST has partnerships with more than 60 mobile operators covering about 3 billion subscribers, including AT&T, Verizon Communications and Vodafone. BlueBird 12 and 13 recently deployed their arrays, a New Zealand gateway is operational and US Mobile is preparing a fourth-quarter direct-to-cell launch.

Berenberg initiated ASTS at ‘Buy’ with a $92 target on Wednesday, implying about 50% upside from the mid-$60s and helping lift the shares about 12%. 

“There’s like 50 things that could go wrong with SpaceMobile,” Feroldi cautioned, pointing to launch execution, cash burn, dilution and Starlink competition. Yet, if ASTS succeeds, he said it could resemble “American Tower in space,” potentially supporting 20% to 30% free-cash-flow margins. “If this works, would it be ridiculous to think this is a $100 billion company or a $200 billion company?” Feroldi said. “Probably not.”

SpaceX Is Still The ‘Top Dog’

Despite backing RKLB over ASTS, Feroldi placed SpaceX above both due to its scale and first-mover advantage. “Look for the top dog and first mover,” he said. “Who is the top dog and first mover in the space race? SpaceX.” Feroldi said he would consider breaking his usual rule against buying newly listed companies during their first year, though he would prefer SpaceX at a valuation of roughly $600 billion to $800 billion. 

“I would go with SpaceX first, Rocket Lab second, ASTS a distant third,” Feroldi added. 

How Do Retail Traders Feel About ASTS, RKLB And SPCX?

On Stocktwits, retail sentiment was ‘bullish’ for ASTS amid ‘high’ message volume, ‘neutral’ for RKLB amid ‘low’ activity, and ‘bearish’ for SPCX amid ‘extremely low’ volume. 

Over the past year, ASTS and RKLB have each gained 28%, while SPCX has fallen 13%. 

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