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More Reading from MarketBeat
Space Stock Boom: Why Retail and Wall Street Are Aligning
Reported by Jeffrey Neal Johnson. Published: 1/27/2026.
What You Need to Know
- Retail enthusiasm and Wall Street research are converging around space technology stocks in 2026.
- Rocket Lab and AST SpaceMobile sit at the center of the momentum, but each carries very different risk.
- For broader exposure with less single-event volatility, a space-focused ETF can offer a more balanced approach.
For the last five years, the narrative between retail and institutional investors has looked like a battle. Retail traders chased hype while institutions stuck to the numbers. Because the two approaches are fundamentally different, they were often on opposite sides of the same trades.
But 2026 has brought a shift that may change how some market participants play the game. According to a new report from J.P. Morgan (NYSE: JPM), retail traders have migrated away from the meme stocks and earlier artificial intelligence (AI) plays. Their latest obsession: the space technology sector.
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In previous years, Wall Street’s top investors might have warned against following the crowd. This time, however, the smart money appears to be following retail. On Jan. 16, 2026, Morgan Stanley (NYSE: MS) issued a report that effectively validated the entire sector. The bank signaled that the Orbital Economy is no longer a science project but an industrial asset class ready for harvest.
When Main Street enthusiasm meets Wall Street validation, it creates a powerful setup for stock-price growth. Let’s break down the specific stocks at the center of this rare alignment.
Rocket Lab: The Apple of Space Gets an Upgrade
Rocket Lab USA (NASDAQ: RKLB) exemplifies this new market unity. For years it has been a retail favorite thanks to a transparent CEO and frequent launches. Now the institutions are catching up.
Rocket Lab received two significant analyst upgrades in one week. First, on Jan. 16, 2026, Morgan Stanley upgraded the company to Overweight and raised its price target to $105.
That was followed on Jan. 20 by an upgrade from Bank of America, which doubled its price target from $60 to $120.
Together these firms have pushed the consensus price target to $112.50, implying healthy upside from the stock’s recent trading level near $86.
Analysts pointed to Rocket Lab’s evolution from a small-rocket launcher into a large-scale infrastructure provider as the primary catalyst.
Navigating the Turbulence
The stock recently faced a test. On Jan. 21, 2026, Rocket Lab experienced a structural failure during a pressure test of its new Neutron rocket tank. In the past, similar news could have triggered a panic sell-off.
Instead, the stock dipped roughly 10% and showed resilience. Why? The company has a substantial financial cushion: an $816 million contract with the Space Development Agency (SDA). Progress also continues with the arrival of new Hungry Hippo payload fairings at the launch site. The combination of government backing and tangible program progress gives investors reason to look past temporary testing setbacks.
AST SpaceMobile: Squeezing the Skeptics
If Rocket Lab is the steady industrial play, AST SpaceMobile (NASDAQ: ASTS) is the high-octane battleground. The company is attempting a technological feat many deemed impossible: connecting standard cell phones directly to satellites for broadband data.
Understanding the Short Squeeze
AST SpaceMobile is trading around $108, but it remains one of the market’s most controversial names. Roughly 15% of its available shares are sold short.
Short selling is a bet the stock will fall. When a highly shorted stock receives positive news, its price can jump, forcing short sellers to buy shares to close losing positions. That buying pressure can drive the price even higher in a chain reaction known as a short squeeze.
The February Catalyst
The fuse for a potential squeeze could be lit soon. Investors are focused on late February 2026, when the BlueBird 7 satellite is scheduled to launch on a Blue Origin rocket.
After the launch, the company plans to begin beta commercial service with AT&T (NYSE: T) in the first half of the year. If these satellites can reliably deliver high-speed data to unmodified phones, the bearish case weakens. Some institutional holders, including American Tower (NYSE: AMT), have sold shares to lock in gains after a big run-up, but the retail base has largely held, waiting for this moment of truth.
The Runners: Real Revenue, Real Rockets
For investors who prefer balance sheets over buzz, the sector includes two quieter, financially robust options.
Planet Labs: The Data Machine
Planet Labs (NYSE: PL) is often described as the Bloomberg Terminal of Earth: it launches satellites and sells the data they collect.
- The Sovereign Shift: Governments are increasingly focused on geopolitical stability, driving demand for sovereign cloud data and dedicated intelligence services.
- The Scoreboard: That demand helped Planet Labs post $81.3 million in revenue last quarter. With successful launches of their Pelican-5 and Pelican-6 satellites, they are upgrading products as demand peaks.
Intuitive Machines: The Lunar Leader
Intuitive Machines (NASDAQ: LUNR) stands out as one of the few growth companies with a fortress balance sheet.
- Cash Is King: The company holds more than $600 million in cash and carries minimal debt. In a high-rate environment, having little to no interest expense is a major advantage.
- The Next Mission: Trading near $20, Intuitive Machines is preparing for its IM-2 and IM-3 missions to the Moon in the first half of 2026. Unlike many competitors, it has the cash reserves to weather delays, making it a lower-risk way to access the lunar economy.
Don’t Pick the Winner: Buy the Whole Race
Investing in space is exciting but volatile. Rockets explode, tests fail and delays occur. For investors who want exposure without sweating every launch, the Procure Space ETF (NASDAQ: UFO) is a logical tool.
This ETF acts like a basket, holding shares in Rocket Lab, AST SpaceMobile, Planet Labs and other global players, including MDA Space (a prominent international space-systems company).
- The Trade-off: You likely won’t see a 50% gain in a single day the way you might with AST SpaceMobile.
- The Benefit: Poor performance at one company can be offset by stronger performance at others, stabilizing the portfolio.
- The Numbers: The fund trades near $47 and has returned about +92% over the past year. It also pays a small dividend, providing modest income while the sector matures.
The Era of Concept Stocks Is Over
The convergence of the J.P. Morgan and Morgan Stanley reports with retail enthusiasm is notable. Rarely do the quantitative models of the world’s largest banks align so closely with Main Street excitement.
The Orbital Economy has matured. It’s no longer just colorful PowerPoint presentations and promises of future glory. In 2026, revenue is real, rockets are flying and contracts are being signed. Volatility is guaranteed, but the trend is undeniable: space is open for business, and Wall Street is finally buying tickets.
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Further Reading: 1,788 U.S. banks have THIS in common with SVB (From Decentralized Masters)
