Rocket Lab Shares Surge on Defense Sector Momentum

A remarkable turnaround characterized Rocket Lab USA’s trading week. Following significant declines at the opening, the company’s stock staged an impressive Friday recovery, closing with a nearly 4% gain that erased previous losses. This upward momentum, however, originated not from the company’s own rocket launches but from an unlikely source: the U.S. defense industry.

Broad Sector Optimism Drives Gains

Friday’s rally was fueled by a wave of sector-wide optimism triggered by multi-billion dollar government contracts. A significant missile award for industry leader Lockheed Martin served as the primary catalyst, energizing the entire defense sector and lifting growth-oriented companies like Rocket Lab in its wake. The notably high trading volume, reaching approximately 17-18 million shares, confirms substantial buyer interest was behind the move.

Notably, Rocket Lab’s performance outpaced many more established competitors. This suggests the market is increasingly recognizing the company as a credible and innovative participant within the aerospace ecosystem, particularly for contracts related to national security.

Operational Milestones and the Neutron Program

Beyond these short-term market movements lies a story of fundamental operational progress. A key development was the late August inauguration of Launch Complex 3 in Virginia. This new facility provides critical infrastructure for the company’s ambitious Neutron rocket program.

Should investors sell immediately? Or is it worth buying Rocket Lab USA?

The Neutron, a reusable heavy-lift launch vehicle, is central to Rocket Lab’s strategy for accessing its next major growth phase. It is designed to carry larger payloads, a capability that is expected to unlock more lucrative government contracts. Investors are closely monitoring the program, with the first test flight still scheduled for late 2025.

Strong Fundamentals Underpin the Valuation

The company’s robust growth is already reflected in its financial results. Second-quarter revenue surged by 36% year-over-year, driven largely by the reliable performance of its Electron rocket. For the current quarter, management has provided revenue guidance in the range of $145 million to $155 million, accompanied by an impressive projected gross margin of 39% to 41%.

Although the journey to sustained profitability continues, a growing backlog of orders and strategic advancements in the rocket program reinforce a positive long-term outlook. The recent price surge demonstrates that Rocket Lab is benefiting not only from its own execution but also from its evolving role within the broader national security and space infrastructure landscape.

The pivotal question remains: Can the space pioneer harness this current momentum and achieve a definitive breakthrough with its Neutron rocket?