Since the IPO of Space Exploration Technologies (SPCX -0.35%), space-related stocks, including Rocket Lab (RKLB +9.04%), have tumbled. Rocket Lab's slide may come to a grinding halt on the back of a lucrative new deal with the U.S. Space Force. Should investors jump on board?
NASDAQ: RKLB
Key Data Points
On July 27, Rocket Lab announced a $266 million contract with the Space Force's Rocket Systems Launch Program. The government award covers 12 suborbital missions, with the option for up to six more, flown mostly from a new launch site in Kodiak, Alaska.
Rocket Lab's revenue keeps on climbing. The end-to-end space company finished 2025 with $602 million in revenue and more than $2 billion in its backlog as of the first quarter of 2026. Rocket Lab is also close to launching its reusable medium-lift rocket, Neutron. If Neutron is successful, it poses a direct challenge to SpaceX's launch dominance.
Image source: The Motley Fool.
The stock is down more than 50% from its peak of $151 per share in late May. This is a volatile stock, and with the space industry still in its infancy, investors should expect wild price swings. Still, Wall Street is largely bullish on Rocket Lab, and so am I.
With a steady stream of new contracts and a strong relationship with the U.S. government, Rocket Lab has significant potential. There's always execution risk with a company dealing in such expensive, high-stakes engineering projects. Still, so far, the company has proved it is capable of both building innovative space technologies and closing deals. This latest deal with the Space Force further solidifies my belief that Rocket Lab is here to stay and is a buy for patient, risk-tolerant investors.
