Exclusive: Starship's Weak Spot Could Help Rocket Lab and Firefly

On its 14th test flight Monday, SpaceX’s (NASDAQ:SPCX) Starship reached orbit for the first time and deployed 26 next-generation Starlink V3 satellites. With one engine out, SpaceX cut the mission short and brought Starship down in a controlled splashdown in the Pacific Ocean. 

• SPCX stock is up. See the real-time price action here. 

Regular service is next. SpaceX wants Starship flying routinely later this year, and CEO Elon Musk plans to launch Starlink satellites 60 at a time once it does.

Andrew Bonwick, VP of Product Development at Relm, said Starship is “expected to bring more than four times the mass to orbit compared to other large rockets, especially Falcon 9.” 

Big capacity has a limit, though. Bonwick says that leaves room for smaller launch companies.

One Rocket, One Orbit

Starship’s size comes with a tradeoff. 

“Each Starship flight will only deliver to one orbit or a set of orbits,” Bonwick said. He called this “great for mega-constellations and big payloads, such as space stations (StarLab, VAST) and data centers, which can take up the whole load.”

Smaller customers don’t get to choose. “However, smaller operators in LEO will need to compromise on their orbits or get lucky with the launch,” he said. Bonwick expects demand for other launch options. 

“This leaves plenty of room for other operators, where customers can pay more to get delivered where and when they want on a smaller vehicle,” he said.

4 Companies Stand To Benefit

• Rocket Lab Corp. (NASDAQ:RKLB) sells dedicated rides on its smaller Electron rockets so each customer’s satellite goes to the orbit it picks. Demand looks strong — Rocket Lab ended the second quarter with a $2.36 billion backlog, up 137% from a year earlier. 

• Firefly Aerospace Inc. (NASDAQ:FLY) offers the same dedicated ride on its Alpha rocket. “Launch demand is the most constrained I’ve ever seen,” CEO Jason Kim told CNBC in August.

• Northrop Grumman Corp. (NYSE:NOC) has exposure through Firefly. The defense contractor invested $50 million in the company to help fund Eclipse, a medium-lift rocket the two companies developed together.

• Voyager Technologies Inc. (NYSE:VOYG) sits on the other side of the trade. Its Starlab station is the kind of full-load cargo Bonwick says fits SpaceX’s Starship best.

Dedicated Launch Is Scarce

Small rockets are still hard to book and launch slots are being reserved one to two years ahead with few companies serving the market.  

“A small rocket acts like an orbit-on-demand taxi,” Ujjwal Chaudhry, a partner at Analysys Mason, told CNBC. His firm valued the market for launches under 1,000 kilograms at $5 billion in 2025.

Private rivals are adding capacity. Stoke Space said its Nova Pathfinder rocket is fully booked “for the next couple years,” and it plans to keep the rocket for dedicated missions.

Monday’s successful launch proved Starship is now the cheapest ride to orbit, but Bonwick’s view suggests some customers will still pay more to pick their own orbit.

SPCX Stock Price Activity: SpaceX stock was up 1.97% to $148.34 at the time of publication on Tuesday, according to market data from Benzinga Pro.

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