For the most part, space stocks have knocked it out of the park this year. However, that hasn't been the case with Redwire Corporation (RDW +2.22%). Year to date, shares in this space infrastructure and defense technology company have fallen by over 48%.
In contrast, the S&P 500 index is up by around 17%. Moreover, there are plenty of stocks in the space sector that have delivered triple-digit percentage gains to investors in 2025.
Not only that, in the case of particular space stock, despite a big run-up in 2025, this name has the potential to deliver once again in 2026, to a greater extent than is likely with Redwire.
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Redwire's 2025 weakness could carry into 2026
Over the course of the year, Redwire shares have pulled back, primarily due to investor disappointment. Following two consecutive earnings misses, coupled with other issues such as share dilution and government contract delays, investors remain cautious about the company's prospects.
Yes, over the past month, Redwire has made a partial rebound. For instance, shares have most recently rallied on news of the company entering an agreement with European aerospace company The Exploration Company to provide it with two docking systems for its flagship Nyx spacecraft.
NYSE: RDW
Key Data Points
Yet, while the company may continue to rack up contract wins, these alone may not sustain the current rally. For the stock to recover next year and deliver the types of "to the moon" returns investors anticipate from space sector stocks, Redwire will likely need to make further progress in reaccelerating growth, as well as approaching the point of consistent profitability.
Until this happens, even a further partial rebound may prove challenging. Instead, Redwire's 2025 weakness is likely to carry over into 2026.
Why AST SpaceMobile could stay a space stock winner
Contrast Redwire's questionable prospects with those of one of the top-performing space stocks this year, AST SpaceMobile (ASTS +0.28%). Year to date, shares in this provider of satellite-based cellular broadband services have been on a tear, rising over fourfold, from the low $20s per share in January to the low $80s per share.
NASDAQ: ASTS
Key Data Points
Yes, after making a triple-digit leap higher, you may be thinking, "How much more room does this stock have to recover?" As seen from the stock's resilience, even after reporting weaker-than-expected quarterly results last month, investors remain focused on the long-term story with AST SpaceMobile.
Namely, as commercial activity continues to accelerate, including commercial agreements with major telecom companies such as Verizon Communications, investors will remain bullish about the company's growth prospects over the next few years.
In the near term, sell-side analyst forecasts anticipate AST SpaceMobile's sales to increase by 342.6%, or more than fourfold, in 2026 Better yet, long-term earnings forecasts suggest that the company is just a few years away from positive earnings. Longer-term earnings projections anticipate earnings per share (EPS) of $0.35 in 2027 and $2.57 in 2028.
The verdict on these two space stocks
Make no mistake -- while there may be evidence to support a further rally for AST SpaceMobile over a Redwire rebound, it's worth noting that both of these names carry a high level of risk. Both remain early stage companies. Both have yet to reach profitability, with current forecasts calling for further net losses in 2026.
The valuation of both stocks remains largely based on future potential, rather than current results. Any hiccup or misstep could result in high stock market volatility for either name. Hence, position size accordingly. Conversely, depending on subsequent news with Redwire, the bull case for this struggling space stock could improve in the months ahead.
That said, if you stomach the risk and are willing to trade near-term volatility for the potential for outsized long-term returns, consider AST SpaceMobile to be the stronger choice right now.
