• Rocket Lab and Firefly Aerospace have been upgraded to ‘Overweight’ at KeyBanc.
• The top U.S. space agency has doubled down on its space exploration efforts and is working to establish a Moon Base through its Artemis missions.
• Wall Street is also largely bullish on both companies, with 14 of 18 analysts rating RKLB a ‘Buy’ or higher, and 6 of 9 rating FLY similarly.

Space stocks staged a rebound Monday after getting caught in the fallout from SpaceX's blockbuster initial public offering last week. Shares of Rocket Lab (RKLB) and Firefly Aerospace (FLY) jumped in premarket trading after KeyBanc Capital Markets upgraded both stocks, saying the current pace of activity across the space sector has not been seen since the first moon landing.

At the time of writing, both stocks were up more than 6% in premarket trading on Monday. On SpaceX’s IPO day, RKLB stock closed with a more than 10% decline, while FLY fell by more than 19%.

Why KeyBanc Turned Bullish On RKLB, FLY

KeyBanc turned bullish on both stocks and assigned them an ‘Overweight’ rating from ‘Sector Weight,’ citing the current NASA activity, which is accelerating at a pace not seen since the Apollo era, according to TheFly.

The firm believes both companies are set to benefit from “compelling opportunities across the rapidly growing space sector" with exponential growth potential for satellites and space-based applications, even as launch supply remains "structurally constrained.”

It views Rocket Lab and Firefly Aerospace as "well-capitalized" commercial space companies with exposure to national security and NASA priorities. RKLB has a price target of $135, implying an upside potential of roughly 32% as of the stock’s last closing price, and FLY has a price target of $50, implying a 57% upside potential.

Multiple Positive Catalysts

Both companies have seen multiple positive developments in recent weeks. For Rocket Lab, recent catalysts include joining the Nasdaq-100 this month, a crucial certification from the Space Development Agency for its missile-interception solution, and growing opportunities in the commercial launch services market.

Firefly, on the other hand, was recently selected by NASA to provide lunar drones as part of the Moon Base initiative and continues to see growing opportunities to carry payloads through its launch services.

The Rise Of Space Age

The top U.S. space agency has doubled down on its space exploration efforts and is working to establish a Moon Base through its Artemis missions, which will support life and are among the initial steps toward transitioning humans from Earth to Mars.

The ambition to become an interplanetary species has increasingly driven demand for very large energy storage systems that can be deployed in space, as access to traditional power grids will not be possible.

Moreover, companies are seriously considering sending data centers and advanced computing infrastructure into space, which can provide cybersecurity, artificial intelligence, national security, and defense solutions, among other things, from up above.

What Do Retail Traders Think About RKLB and FLY?

On Stocktwits, retail sentiment around both stocks remained in ‘bullish’ territory over the past 24 hours.

Wall Street is also largely bullish on both companies, with 14 of 18 analysts rating Rocket Lab a ‘Buy’ or higher, and 6 of 9 rating Firefly Aerospace similarly. Neither of them has any ‘Sell’ ratings.

RKLB has surged 47% so far this year, while FLY has surged 43%, outperforming the S&P 500.

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