Rocket Lab's Growth Potential Gains Altitude on Defense News

Key Points

• Rocket Lab was selected for two major hypersonic defense programs in the U.S. and U.K., opening the door to multi-billion-dollar contracts.
• The stock shows strong technical resilience, holding above its 200-day moving average while the broader market struggles.
• Investors will look to the upcoming May 8 earnings report for updates on the Neutron rocket and further contract progress.

Rocket Lab USA NASDAQ: RKLB, a prominent player in the aerospace and defense sector and rival to SpaceX,  is in the spotlight following a significant announcement this week. The news comes as RKLB continues to show impressive relative strength, an outlier in a market weighed down by rising tariffs, geopolitical uncertainty, and fears of a broader economic slowdown.

While the S&P 500 trades firmly below its 200-day moving average, Rocket Lab has done the opposite, holding above its key long-term trend line and consolidating in a steady range. With momentum, major defense-related updates, and technical resilience all working in its favor, is RKLB signaling further outperformance ahead?

Rocket Lab Tapped for Billion-Dollar Defense Programs

Late Monday, Rocket Lab revealed it had been selected to participate in two major defense initiatives to advance hypersonic technology. These awards could position the company to compete for multi-billion-dollar contracts over the coming years.

The first is the U.S. Air Force’s Enterprise-Wide Agile Acquisition Contract (EWAAC), a $46 billion Indefinite Delivery-Indefinite Quantity (IDIQ) contract that runs through 2031. This program allows the Air Force to rapidly procure new technologies and engineering services. While the size of individual awards is not fixed, the opportunity to secure repeated contracts over several years offers Rocket Lab a long runway for revenue growth.

In the U.K., Rocket Lab was also selected for the Hypersonic Technologies & Capability Development Framework (HTCDF), a $1.3 billion initiative designed to fast-track the development of hypersonic systems. As an approved supplier, Rocket Lab can now bid to provide services, technology, and test capabilities to support the U.K.'s evolving hypersonic strategy.

Rocket Lab’s HASTE (Hypersonic Accelerator Suborbital Test Electron) vehicle is at the center of these programs. It is a suborbital version of its proven Electron rocket adapted for high-speed testing missions. The company has already completed three HASTE launches for the U.S. Department of Defense and aims to scale its presence in this emerging defense niche.

Technical Strength Sets RKLB Apart

Following the announcement, RKLB shares surged nearly 10% in after-hours trading and carried those gains into the following session. The stock is now up roughly 11% month-to-date, even as the broader market slumps under heavy selling pressure.

While still down nearly 40% from its 52-week high, RKLB’s recent consolidation above a rising 200-day simple moving average (SMA) is noteworthy. In technical terms, this behavior suggests a potential bottom has formed, with the higher timeframe uptrend still intact. With sentiment on the broader market still cautious, RKLB’s resilience could position it as a potential leader once the indexes find their footing and resume a new uptrend.

All Eyes on Earnings...and Neutron

Rocket Lab's upcoming earnings report on May 8 will be the next significant catalyst. Investors will be watching closely for updates on the company’s recent defense-related developments and any progress on its highly anticipated Neutron rocket.

Neutron is Rocket Lab’s medium-lift rocket that is currently in development. It is a key part of the company’s strategy to compete with SpaceX and capture a share of the high-demand commercial and government satellite launch market. Investors are hoping for clarity on Neutron’s testing progress and a potential timeline for its inaugural launch, which could open the door to large-scale contracts and new revenue streams.

Sentiment Remains Mixed

Despite the recent bullish news and technical strength, sentiment around RKLB remains divided. As of March 31, short interest stood at 16.95%, up from 15.13% two weeks prior, indicating a significant portion of the market remains skeptical about the company’s valuation and growth trajectory.

Still, Wall Street analysts remain confident. According to 12 analyst ratings, RKLB holds a Moderate Buy rating and a consensus price target of $22.72, suggesting nearly 14% upside from current levels.

With bullish technicals, increasing defense exposure, and several key catalysts on the horizon, Rocket Lab is a name to watch closely in the coming weeks. Investors may want to keep it on their radar, especially if earnings bring more clarity and confidence in the company’s long-term trajectory.