Firefly Aerospace Inc. (FLY) shares took a hit Friday, falling alongside other space-related stocks as the sector cooled off from what had been a pretty impressive rally heading into the new year.

What's Behind the Pullback?

Space stocks had been riding high thanks to a couple of big catalysts. First, there's buzz around a potential SpaceX IPO in 2026. Second, President Donald Trump signed an executive order aimed at giving the space industry a boost. Add in the appointment of billionaire Jared Isaacman to lead NASA, and you had a recipe for year-end optimism.

Andrew Chanin, CEO of Procure Holdings (UFO), explained the enthusiasm to MarketDash. He pointed out that putting influential leaders in key positions can "pull different levers" that drive momentum across the entire sector.

Chanin specifically highlighted NASA's Artemis program, which aims to return humans to the Moon, as a major focus area for Isaacman. He also noted the administration's growing emphasis on "defense national security," a shift that could reshape how the government invests in and incentivizes space-related companies.

According to Chanin, this renewed government attention on space, combined with the possibility of a defense-driven "space race," could generate meaningful long-term tailwinds for the industry. That's the bullish case, anyway.

Firefly also caught attention recently after joining the Russell 2000 Index in December, one of 18 companies added that month. The inclusion automatically put it in the broader Russell 3000 Index as well.

Price Action: Firefly shares were down 11.47% at $26.99 at the time of publication Friday.