What Happened?

Shares of aerospace and defense company Rocket Lab (NASDAQ:RKLB) jumped 13.1% in the morning session after the company announced it was selected to provide hypersonic test launch capabilities through its HASTE launch vehicle, along with other related services, under two multi-billion-dollar government development programs for the United States and the United Kingdom. 

The first contract, with the U.S. Air Force, fell under the $46 billion Enterprise-Wide Agile Acquisition Contract (EWAAC), and was designed to bolster the Air Force's capabilities. 

The second contract was with the United Kingdom's Ministry of Defence (UK MOD) for its Hypersonic Technologies & Capability Development Framework (HTCDF), a roughly $1.3 billion (£1 billion) initiative to advance the UK's hypersonic capabilities. 

The company's inclusion in both U.S. and UK programs reflected growing demand for its launch technologies and services, and could drive long-term revenue growth while elevating its status as a trusted defense partner.

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What The Market Is Telling Us

Rocket Lab’s shares are extremely volatile and have had 63 moves greater than 5% over the last year. But moves this big are rare even for Rocket Lab and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 5 months ago when the stock gained 53.4% on the news that the company reported impressive third-quarter results and provided an optimistic EBITDA forecast for the next quarter, which blew past analysts' expectations. Its revenue and EBITDA both outperformed Wall Street's estimates in the quarter. The performance was largely driven by strong demand in its space systems segment. Zooming out, we think this was a very good quarter.

Rocket Lab is down 17.9% since the beginning of the year, and at $20.48 per share, it is trading 35.1% below its 52-week high of $31.57 from January 2025.

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