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Once space was no longer the sole province of government but was opened to private enterprise the possibility for real entrepreneurship was born. It is impossible to not be awed by watching a SpaceX Falcon 9 rocket returning to the launch pad for reuse. 

The possibility of real space travel and space tourism has never been greater. Analysts at Morgan Stanley believe the space economy could evolve into a $1 trillion opportunity by 2040.

Failures will litter the industry’s evolution, however. Even a wildly successful company like SpaceX has witnessed its shares of failures while Amazon‘s (NASDAQ:AMZN) Jeff Bezo has had a difficult time getting his Blue Origin space company aloft. Yet there are companies making progress. It’s a risky business but we look at three of them to see which is the best space stock to invest in.

Intuitive Machines (LUNR)

Source: Below the Sky / Shutterstock.com

Easy come, easy go. Intuitive Machines (NASDAQ:LUNR) was flying high after it became the first private company to land on the moon. The stock rocketed tenfold in value hitting $21 per share from the $2 launch pad it started the year at when it touched down but then said, Oops! Our lunar lander actually tipped over after landing. The stock cratered and lost almost three-quarters of its value. Intuitive Machines went from having a near-$1 billion market valuation down to $585 million as of this writing. Ouch!

Yet the Odysseus lander even making it to the moon is a fantastic feat that should be celebrated. It is the first time since 1972 that an American spacecraft landed on the moon. And Intuitive Machines is already planning to go back with a second mission later this year with a third in the planning stages. The kinks will get worked out as the space company advances its operations, expensive though those kinks might be.

For investors, though, the stock tanking is a good thing. Many weren’t even aware of Intuitive Machine’s existence until the landing put the company into their orbit. And now that the space stock grabbed headlines, they have the opportunity to get into a company that seems like it has a bright future in the space economy.

Rocket Lab USA (RKLB)

Source: T. Schneider / Shutterstock.com

For most investors interested in space stocks, Rocket Lab USA (NASDAQ:RKLB) is likely more widely known than Intuitive Machines. It is the second most successful space venture after SpaceX. It is regularly launching rockets into space to put satellites into orbit. 

Rocket Lab made 10 successful launches in 2023 and over 40 launches all together with its Electron rocket. Now the space stock is developing its next-generation rocket, the Neutron. It will be a bigger, heavier rocket capable of constellation deployment, cargo resupply and interplanetary missions. Rocket Lab is also perfecting a reusable launch rocket like SpaceX.

Investing guru Cathie Wood has amassed a 6 million-share stake in RKLB stock, or a better than 1% position in the company. She notes that of the 186 space stocks created since 1996, there are only 16 small launch providers still operational. Rocket Lab is one of them and she’s betting big it will be one of the more successful ones.

Rocket Lab is also in the business of designing components and spacecraft for customers. It’s actually the largest revenue generator for the space company. With a multifaceted approach to the industry, RKLB stock seems like a sure winner.

Virgin Galactic (SPCE)

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Of the three space companies listed, Virgin Galactic (NYSE:SPCE) is probably the best known because of its association with founder Richard Brandson and his constellation of Virgin companies. Where the other companies are looking at the commercial aspects of space exploration, Virgin Galactic is seeking to develop space tourism. Unfortunately, that hasn’t worked out so well just yet.

Virgin has had trouble proving it can reliably put people into space and bring them safely back to earth. Yet it does have a queue of 700 people waiting to go if it should succeed. The space stock’s first-generation spaceship was really a proof of concept craft that it has been testing but it will need a second-generation craft to be able to commercialize flight. That should be ready by 2026 but only if Virgin doesn’t run out of money first. Its finances are shaky and to conserve cash it will be reducing the number of test flights it takes.

At around $500,000 for a ticket, space tourism isn’t going to be available for the masses anytime soon. And while SPCE is the most advanced company on the market out there I’d be hesitant about betting big on its success. 

The verdict

Source: T. Schneider / Shutterstock.com

Of the three companies listed, Rocket Lab USA seems the safest bet. Its operational, successful, and will be advancing its business as it develops new, more capable rockets. Intuitive Machines is arguably the most exciting as it is making space exploration a reality again (along with SpaceX, of course). After its successful moon mission — and yes, it was a success despite some troubles along the way — I’ll be keeping my eye on this one for future missions. 

The least investment-worthy is Virgin Galactic. It is burning through cash and is racing against the clock. It will take a long time to become a commercial success. There are only so many people who can afford a ticket. Space tourism is aspirational but not anytime soon.

On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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