While the broader market finished the week on a subdued note, the space sector emerged as the clear winner on Friday, with three high-profile names posting double-digit gains and cementing their positions as some of the most compelling growth stories of 2026.

AST SpaceMobile led the charge with a 14% surge, Firefly Aerospace gained over 12%, and Rocket Lab continued its remarkable ascent following a major analyst upgrade. The collective rally underscores growing institutional and government interest in the commercial space industry as defense spending accelerates.

AST SpaceMobile Secures Major Defense Contract

AST SpaceMobile shares rocketed higher after the company was authorized to bid for contracts under the SHIELD missile defense program, potentially opening billions of dollars in spending from the U.S. military related to the Golden Dome project using direct-to-device satellite technology.

The Texas-based company, which is building the first space-based cellular broadband network accessible directly by standard smartphones, has maintained its position as a highly polarized retail favorite in early 2026. Shares have consolidated near all-time highs around $91-$100 following a massive 260% rally throughout 2025, with the stock up 28% year-to-date.

"The defense authorization represents a significant validation of our technology platform," said one industry analyst. "Direct-to-device satellite communication has moved from science fiction to military necessity in just a few years."

The company reported pro forma cash and liquidity topping $3.2 billion, positioning it well to pursue its ambitious goal of launching between 45 and 60 satellites in 2026. Contracted commercial revenue commitments have surpassed $1 billion in aggregate, providing a solid foundation for growth.

Rocket Lab Earns Morgan Stanley Upgrade to Overweight

Rocket Lab USA jumped after Morgan Stanley upgraded the stock to Overweight, boosting its price target to $105 from $67—a nearly 60% increase that signals growing Wall Street confidence in the company's trajectory.

The upgrade comes as excitement builds for the 2026 debut of Rocket Lab's medium-lift Neutron rocket and the execution of its $816 million Space Development Agency satellite contract—the largest in company history. The stock has gained more than 20% in 2026 alone and is approaching the Street-high price target of $90 issued by Needham.

Rocket Lab has established itself as a go-to services firm for the Japan Aerospace Exploration Agency, the U.S. Space Force, and other government partners. The late-December $816 million contract with the Space Force represents a transformational moment for the company's revenue outlook.

Key Catalysts for Rocket Lab

  • Neutron Rocket Debut: The medium-lift vehicle is expected to launch in 2026, dramatically expanding the company's addressable market
  • Space Development Agency Contract: The $816 million deal provides multi-year revenue visibility
  • Government Partnership Expansion: Deepening relationships with JAXA, Space Force, and other agencies
  • Satellite Services Growth: Spacecraft manufacturing and space systems revenue accelerating

Firefly Aerospace Extends Its Hot Streak

Firefly Aerospace continued its strong 2026 performance with another double-digit gain, as investors looked ahead to the upcoming Blue Ghost Mission 2 lunar landing and the development of the medium-lift Eclipse rocket.

Despite trading well below its $45 debut price from late 2025, Firefly shares are up 34% in 2026, making it a high-beta favorite for traders betting on its recent inclusion in the Russell 2000 and its growing defense backlog.

On January 13, Firefly announced a Block II configuration upgrade for its Alpha rocket, focusing on enhanced reliability, streamlined producibility, and support for responsive launches across the globe. The upgrade addresses key concerns from early missions and positions the company for more consistent launch cadence.

The Broader Space Investment Thesis

The simultaneous rally in all three names reflects several converging trends transforming the space industry:

Defense Spending Acceleration: The Pentagon's increased focus on space-based assets has created a procurement surge that benefits nimble commercial operators. The Space Development Agency's transport layer and the SHIELD missile defense program represent multi-billion-dollar opportunities.

Commercial Revenue Maturation: Companies like AST SpaceMobile are transitioning from pure development plays to revenue-generating businesses, with commercial contracts providing validation of their technology platforms.

Analyst Recognition: Wall Street's growing coverage of space stocks—evidenced by Morgan Stanley's upgrade of Rocket Lab—signals that the sector is graduating from speculative to institutional-grade.

Risks and Considerations

Not everyone is bullish on the sector. Scotiabank issued a downgrade on AST SpaceMobile to Sector Underperform, citing extreme valuation multiples. The stock trades at significant premiums to revenue, requiring flawless execution of ambitious launch schedules.

Technical execution remains the primary risk across all three names. Rocket launches remain inherently risky endeavors, and any mission failures could quickly reverse recent gains. Additionally, the space industry faces challenges from supply chain constraints and the capital-intensive nature of satellite manufacturing.

What Investors Should Watch

As the space sector enters what many analysts consider a pivotal year, several milestones will determine whether these stocks can sustain their momentum:

  • AST SpaceMobile's satellite launch schedule and commercial service activation in the United States
  • Rocket Lab's Neutron rocket debut and execution of its Space Development Agency contract
  • Firefly's Blue Ghost Mission 2 lunar landing and Eclipse rocket development progress
  • Broader defense budget allocations and contract awards throughout 2026

For investors with appropriate risk tolerance, Friday's rally may represent just the beginning of a transformational year for commercial space companies positioned at the intersection of government spending and technological innovation.