Space Tech Stocks Soar as Morgan Stanley Upgrades Sector Outlook for 2026

The space technology sector is gaining momentum as analysts raise their outlook for 2026. Morgan Stanley has upgraded the industry to an 'Attractive' rating, citing stronger growth prospects. Several key companies have also seen changes in their stock ratings and price targets.

Morgan Stanley’s latest report highlights a positive shift for space technology firms. The sector’s improved rating follows expectations of higher rocket launch activity and supportive U.S. policies.

Rocket Lab has received an 'Overweight' rating, with its price target rising sharply to $105 from $67. The company plans to increase Electron rocket launches in 2026 and debut its larger Neutron rocket early in the year. Analysts note better risk-reward balance and multiple growth drivers for the firm. MDA Space has also been upgraded to 'Overweight', with its target price climbing to $46 from $32. The company currently trades below peers, suggesting potential for revaluation. Meanwhile, Iridium saw a downgrade to 'Equal-weight', with its target dropping to $24 from $37. Speculation continues about SpaceX’s possible initial public offering in 2026, though no official confirmation has been made.

The upgraded ratings reflect confidence in the space sector’s expansion. More frequent launches, new rocket deployments, and policy support are expected to lift industry performance. Companies like Rocket Lab and MDA Space stand to benefit from these trends in the coming year.