Fed Interest Rate News Impacts Space Stocks: Rocket Lab, AST SpaceMobile, Virgin Galactic
Rocket Lab should've rocketed
On Monday, Rocket Lab announced it won a U.S. Space Force contract to launch an experimental 'DISKSat' small satellite into very low earth orbit (VLEO) for $14.5 million, twice its usual price for launches.
Two days later, Rocket Lab confirmed it will reuse and refly a previously flown rocket for the first time, similar to SpaceX's achievement.
Is it time to sell space stocks?
The surge in inflation and the speculation around Fed interest rate cuts in 2024 have raised doubts among investors, leading to a sell-off in space stocks.
Even with the prospect of higher rates, unprofitable companies like AST, Virgin Galactic, and Rocket Lab may face challenges in taking out loans to drive profitability.
- Analysts foresee Rocket Lab earning its first profit in 2026, while AST and Virgin Galactic may become profitable by 2027.
- Investors need to reconsider their investment strategies and expectations in light of the changing interest rate environment.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.