Morgan Stanley has adopted an "Attractive" view on the space technology sector for 2026, arguing that last year's outperformance will continue. Analyst Kristine Liwag cites higher launch cadences, new product introductions, and policy support as key drivers. The bank upgraded Rocket Lab and MDA to Overweight, while downgrading Iridium to Equal-weight.

The firm's bullish stance follows a record 2025 for launch activity and supportive U.S. policy. Rocket Lab's price target was raised to $105 from $67, driven by expectations for its first Neutron launch early this year. MDA's target moved to $46 from $32, with analysts seeing strong re-rating potential as its valuation gap widens.

Iridium, however, faces uncertainty during its strategic pivot, prompting the downgrade and a reduced $24 price target. The sector's momentum hinges on sustained launch rates and policy tailwinds. Investors will watch for execution on product roadmaps and whether government support continues to fuel the industry's maturation.