Rocket Lab USA, Inc. (NASDAQ: RKLB) saw its stock price plummet by 5.01% in pre-market trading on Wednesday, following a significant rally the previous day. This decline comes after the aerospace and defense company's shares surged 13.1% on Tuesday, driven by positive news about government contracts.
The Tuesday rally was fueled by Rocket Lab's announcement that it had been selected to provide hypersonic test launch capabilities through its HASTE launch vehicle. The company will also offer related services under two multi-billion-dollar government development programs for the United States and the United Kingdom. This news had initially bolstered investor confidence in the company's growth prospects.
However, the pre-market decline on Wednesday suggests a potential correction or profit-taking following the previous day's substantial gains. Investors may be reassessing the stock's valuation in light of the rapid price increase. It's worth noting that such volatility is not uncommon in the aerospace and defense sector, especially following significant contract announcements.
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