AST SpaceMobile (ASTS) and Rocket Lab (RKLB) are aggressively mirroring SpaceX’s vertically integrated business model, but a prominent analyst says execution risks and stretched valuations loom large.
Analyst Tim Farrar, president of TMF Associates, appeared on the Prof G Markets podcast to outline his concerns about both companies and their ambitious growth strategies.
“Both Rocket Lab and AST are trying to emulate SpaceX,” Farrar said, noting that vertical integration is central to each company’s long-term business case.
Rocket Lab has evolved from a launch provider into a satellite systems company and is now pursuing a further expansion through its planned acquisition of Iridium, a 66-satellite network serving more than 2.5 million subscribers.
The Iridium deal generates over $870 million in annual revenue and would, according to CEO Peter Beck, transform Rocket Lab into a “self-launching tier 1 space power.”
Farrar described Iridium as a “fairly solid business” that produces consistent cash flow, but stressed that Rocket Lab’s broader ambitions are heavily tied to its Neutron rocket program, which continues to face delays.
“That’s really, really delayed,” Farrar said of Neutron. “Last year, they were saying it was going to launch in 2025. Now they’re saying, we hope 2026. A lot of analysts are thinking probably 2027.”
Rocket Lab still targets delivering Neutron to the launch pad in the fourth quarter, though Beck has acknowledged that “the window for an end-of-year launch is narrowing,” with more than 400 Archimedes engine hot fires completed and first engine set production underway.
On the AST side, the company raised $1.15 billion in July and held more than $3.7 billion in pro forma cash, cash equivalents, and restricted cash at the end of June, capital that could support vertical integration efforts.
Despite that financial cushion, Farrar flagged a pressing operational problem for AST centered on access to orbit. “They’re struggling to get launches from third parties,” he said. “Now they’re scrambling for launches.”
AST has secured 10 launches with two providers and is targeting approximately 45 BlueBird satellites in orbit by early 2027, with BlueBird 14 through 16 nearly ready to ship and satellites through BlueBird 46 currently in production.
Farrar said Rocket Lab may be relatively better shielded from SpaceX’s competitive pressure because Iridium’s services touch navigation, aviation, and maritime safety markets where SpaceX is less dominant. “Rocket Lab, I think, has a slightly better position,” he said. “It’s trying to avoid the head-to-head competition with SpaceX.”
AST, however, is squarely challenging Starlink in the satellite-based mobile connectivity market, putting it directly in SpaceX’s crosshairs. “SpaceX is so dominant in this business now,” Farrar said. “It’s competing really heavily, particularly against AST.”
AST CEO Abel Avellan has pushed back on that framing, arguing that partnerships with more than 60 mobile operators covering over 3 billion subscribers position the company alongside carriers rather than against them. “In partnership with, not in competition with, mobile network operators,” Avellan said.
Despite Farrar’s caution, retail sentiment on Stocktwits remained “bullish” for ASTS and “extremely bullish” for both RKLB and SPCX, with all three tickers registering high message volume among traders.
Farrar was blunt in his overall assessment of how markets are pricing these two space stocks. “I think both Rocket Lab and AST have got very inflated valuations based on their current business,” he said, while noting that SpaceX also commands “a really high valuation” relative to its existing operations.
Over the past year, ASTS shares have gained 49% while RKLB has surged 87%, underscoring investor appetite for space sector growth stories despite the risks Farrar highlighted.
