Russian Nuclear Weapons With 'An Anti-Satellite Capability' Aren't Stopping This Company From Building Its Own Satellite Constellation To Rival SpaceX

Russian nukes in space sound like the start of a science fiction novel, but the threat is now closer to reality, according to U.S. intelligence, 

Specifically, Russia has been developing the capability to destroy satellites in space from its space-based nuclear weapons that could wreak havoc on critical information systems.

John Kirby, the White House's National Security Council's spokesperson, confirmed the alarming reports, telling reporters he could "confirm that it is related to an anti-satellite capability that Russia is developing."

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Coincidently, around the time of the reports disclosing fears of American officials regarding this new Russian nuclear weapon, Rocket Lab USA RKLB is furthering its goals to directly take on SpaceX in the satellite constellation business and is winning the support of the U.S. government in the process.

Rocket Lab closed out 2023 by announcing a $515 million U.S. government contract it won to build 18 satellites for the Space Development Agency. Given Rocket Lab's current market cap is only around $2.5 billion, this contract represents close to 20% of its entire market cap.

"If you look to where we ultimately want to go, in a lot of ways we want to emulate what [SpaceX] has successfully done, which is work their way towards the applications market. … We're evaluating a lot of different constellation application opportunities," Rocket Lab CFO Adam Spice said.

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In addition to this major contract, Rocket Lab is on the hunt for more merger and acquisition opportunities to consolidate the industry from its position of strength. This month, it closed a $355 million convertible note offering that Spice said is in part because "right now is a great time to be shopping because the ability to raise capital for most companies is very, very, very challenging"

Rocket Lab went public in August 2021 via a special purpose acquisition company (SPAC) in the middle of a SPAC boom. While shares sold just before the closing of the SPAC merger are down over 50%, CEO Peter Beck has said from the start that he's not worried about short-term swings in the stock price, telling CNBC, "At the end of the day, we're in this for the long term."

With news of increased geopolitical tensions between Russia and the United States, and now fears of a space war given Russia's most recent escalation, investors might want to watch the for-profit space business closely. 

While SpaceX is still ahead, perhaps it's in the best interest of national security for the government to spread around its bets to encourage competition in the U.S.'s domestic space race.

Given SpaceX is still a private company, investors don't have to wait for SpaceX to go public to invest in one of its main competitors.

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