Rocket Lab Rises. Why Musk’s Woes Are Good News for SpaceX Rival.

Rocket Lab is expected to generate revenue of about $575 million in 2025, according to FactSet. (Courtesy Rocket Lab)

The feud between Elon Musk and President Donald Trump is entering a new phase after the Tesla CEO said he would form a new political party, drawing criticism from the president.

Rocket Lab stock was a beneficiary of the spat.

After criticizing Trump’s “One Big Beautiful Bill,” Musk announced on Saturday that he would create a new political party, “The America Party,” to take on Republicans and Democrats. Trump responded on Truth Social, saying in part, “I am saddened to watch Elon Musk go completely off the rails.”

Tesla stock lost 6.8% on Monday, while the S&P 500 and Dow Jones Industrial Average fell 0.8% and 0.9%, respectively. Shares of the electric-vehicle maker closed below $285 in early June after the first social-media battle between the two men.

Tesla rivals weren’t getting a boost. Shares of Rivian Automotive fell 2.5%. Coming into Monday, shares have fallen 6.6% over the past month. That’s likely because Trump’s tax bill— which was signed into law on Friday —does away with major portions of former President Joe Biden’s Inflation Reduction Act, known as the IRA, which includes tax credits of up to $7,500 for qualifying EV purchases.

Musk, of course, runs more companies than Tesla. His second-largest, valued at some $350 billion in private markets, is SpaceX. Potential government contract losses could benefit other players, including Rocket Lab, a kind of mini-SpaceX, with launch and satellite-building capabilities.

Rocket Lab’s shares soared 9% on Monday, closing at $38.88.

Rocket Lab doesn’t yet have the size or scale of SpaceX, which handles more than half of all global launches, generating billions of dollars in annual revenue. Rocket Lab is expected to generate about $575 million revenue in 2025, according to FactSet.

Rocket Lab was one of five stocks that Barron’s identified last month as potential beneficiaries of Musk’s fallout with Trump, and it had risen more than 20% coming into Monday trading. However, it was a mixed bag for this handful of stocks on Monday.

AST SpaceMobile is another competitor to SpaceX, aiming to launch a commercial direct-to-cell satellite network service, competing with its bigger peer’s Starlink operation. The stock was up 0.2% on Monday, having gained 46% over the past month.

Tesla also plans to start selling artificial-intelligence-trained humanoid robots. Serve Robotics is a small start-up building AI-trained food-delivery robots. Serve’s stock fell 3.7% on Monday, following a 17% fall over the past month coming into the week. With a market value of about $600 million, Serve is being driven more by speculation over its role in the automation and AI boom than by the actions of Musk.

Finally, Alphabet Waymo unit is Tesla’s chief competitor in robo-taxis. Waymo completes more than 250,000 fully autonomous rides a week. Tesla just launched its robo-taxi service in Austin, Texas, in June.

More attention on robo-taxis can benefit Google, but the direction of Alphabet stock is still largely decided by its core search business. Alphabet stock lost 1.5% on Monday.

Musk’s actions can impact a host of companies. Political spats aren’t necessarily a good reason to buy shares in a competitor. They are only one factor in trading, and as the relationship between Musk and Trump has shown, things can change quickly.

Write to Adam Clark at adam.clark@barrons.com