Rocket Lab’s Archimedes Test Breaks a Losing Streak, but Profitability Questions Linger

Shares rise 2.8% after successful Archimedes engine test, but remain down 48% from highs amid CEO trust sales, $8B Iridium deal, and ongoing losses.

A successful long-duration burn of the Archimedes vacuum engine on July 14 gave Rocket Lab’s stock a much-needed jolt, snapping six straight sessions of declines that had wiped roughly 24% from the company’s market value. Shares climbed 2.81% to €69.50 on the day, recovering from a close of €67.60 the prior session, as investors latched onto tangible progress for the Neutron rocket — the vehicle central to the company’s growth thesis. In premarket US trading, the stock similarly gained 2.76% to $78.85.

The relief rally came at the end of a punishing stretch. Over the prior six trading days, Rocket Lab’s equity had shed about $14 billion in market capitalization, a 23.6% cumulative drop that stood in stark contrast to the S&P 500’s 0.4% gain over the same window. On a one-month basis the stock remains down nearly 27%, and at €69.50 it sits 48% below its 52-week high of €133.80 set on May 27, 2026. The 200-day moving average of €67.26 has so far held as support, but the 14-day relative-strength index of 36.6 points to oversold territory, and annualized 30-day volatility of 95.5% underscores just how jittery the market has become.

Compounding the selling pressure were insider transactions that came to light during the slide. The Equatorial Trust, a family trust linked to CEO Peter Beck, sold 3,275,779 shares between July 6 and 8 at average prices ranging from $81 to $102 apiece. The company disclosed that the sales were executed automatically under a Rule 10b5-1 trading plan established in March 2026, meaning the timing was prearranged rather than opportunistic. Still, the coincidence of large insider dispositions during a period of heavy corporate news — including the planned acquisition of Iridium Communications — has not gone unnoticed by market observers.

That $8 billion deal, structured as $27 in cash plus Rocket Lab stock for each Iridium share, is the other major weight on sentiment. Both boards have unanimously approved the transaction, with a targeted closing in mid-2027. To fund the cash component, Rocket Lab secured a $3.6 billion bridge loan from Deutsche Bank and Wells Fargo, raising fears of future dilution if the company must issue new equity to repay the debt. The prospect of additional shares hitting the market, layered on top of the insider sales, has left existing holders skittish.

The fundamental picture adds another layer of tension. Revenue over the trailing twelve months jumped 45.8% — far outpacing the S&P 500 median of 7.5% — but the operating margin stands at negative 33.2%, compared with an index average of positive 18.4%. Rocket Lab posted an operating loss of $226 million and a net loss of $182.6 million over that period, and its price-to-earnings ratio of negative 254.4 is a stark reminder that profitability remains elusive. The market appears to be repricing the gap between top-line growth and bottom-line reality.

Analysts on Wall Street are largely still constructive, even if the tone has grown cautious. Among 13 analysts tracked, the average price target sits at $113, with a range from $60 to $135. Morgan Stanley maintains a buy rating with a $105 target, while Goldman Sachs rates the stock a hold at $76. Institutional ownership remains high at 71.78%, and one newcomer — Y.D. More Investments Ltd — picked up roughly 10,000 shares in the first quarter, suggesting that large players see value in the pullback.

The broader sector has not helped. A successful sea-platform recovery of a Long March 10B booster by China and a jump in oil prices tied to tensions in the Strait of Hormuz have weighed on space equities generally. Yet there are pockets of tailwind: the US Department of Defense awarded Kratos a $400 million contract for hypersonic systems in July, and Stifel noted that Rocket Lab could benefit through its supply relationship with Kratos and potential additional HASTE test launches. A Stocktwits poll of 1,600 retail investors ranked Rocket Lab the third most popular dip-buying candidate, with 29% of votes, behind only SpaceX and AST SpaceMobile.

On the operational front, the Archimedes test is a clear milestone. The engine is designed for the second stage of Neutron, a 141-foot reusable rocket capable of carrying up to 13,000 kilograms to low-Earth orbit. The first flight remains on track for the fourth quarter of 2026, launching from Wallops Flight Facility in Virginia. Separately, the company secured a NASA contract for three Electron launches — carrying the PolSIR, TSIS-2, and Aspera satellites from New Zealand in 2027 — though the contract’s financial terms were not disclosed.

With the next quarterly report expected on August 6, investors will be watching closely to see whether the Archimedes test can catalyze a sustained turnaround or merely provide a pause in the broader downdraft. For now, Rocket Lab’s stock is still up 6.9% year to date and 86.8% over the past twelve months, but the combination of insider selling, a dilutive acquisition, and persistent operating losses means that every piece of good news has to work twice as hard to move the needle.