Rocket Lab's Military Backlog Tops $2.2 Billion, Yet the Stock Can't Escape a 36% Monthly Rout

Rocket Lab's stock dropped 36.85% in 30 days despite winning a $190M DoD contract, joining the $17B NSSL program, and progress on Neutron. Oversold RSI at 30.2, but sector-wide selloff continues.

The numbers coming out of Rocket Lab's operations look like those of a company on the rise: a $190 million Department of Defense contract for 20 hypersonic test flights, a slot in the Pentagon's expanded $17 billion National Security Space Launch (NSSL) program, and a successful qualification test of the Archimedes engine for the upcoming Neutron rocket. Yet the stock tells a very different story. Shares closed Friday at €59.30, up a modest 0.68% on the day but down 16.48% for the week and a brutal 36.85% over the past 30 days. The disconnect between a swelling order book and a sinking share price has left investors trying to gauge which signal matters more.

The selloff is not Rocket Lab's alone. Goldman Sachs estimates the entire space sector is now trading with five times the volatility of the S&P 500. Peers such as AST SpaceMobile and the newly public SpaceX also shed between 35% and 38% in July 2026. Analysts point to multiple triggers: valuations that soared too far during the May-June rally, the evaporation of the "scarcity premium" after SpaceX's IPO gave investors another pure-play vehicle, and an oversupply of shares from convertible bond conversions and insider selling. Rocket Lab's relative strength index has dropped to 30.2, a level that technically signals an oversold condition and often precedes a bounce. But the broader sector turmoil suggests any recovery may depend on more than just the stock's own fundamentals.

Rocket Lab's contract pipeline, meanwhile, keeps expanding. On July 17, the U.S. Space Force raised the ceiling for the NSSL Phase 3 Lane 1 program by $11.4 billion, bringing the total potential award pool to $17 billion. Rocket Lab is one of seven pre-qualified American providers — alongside SpaceX, United Launch Alliance, Stoke Space, Impulse Space, and Relativity Space — eligible to bid for individual launch contracts. That follows a firm $190 million award from the Pentagon for 20 high-speed HASTE suborbital test flights, a vehicle that boasts a perfect 100% success record. The combined backlog now stands at more than $2.2 billion, covering over 70 missions. Rocket Lab also set a rapid-response record with the Victus Haze mission for the Space Force, launching just 16 hours and 42 minutes after receiving the go order, under a $32 million contract.

The centerpiece of Rocket Lab's long-term growth story remains the Neutron rocket, a medium-lift vehicle designed to compete directly with SpaceX's Falcon 9. Progress on the hardware is tangible: the Archimedes engine passed a full qualification test at NASA's Stennis Space Center. Eight of those engines will power the first stage with 1.5 million pounds of thrust, while the AVac variant for the second stage delivers 1.2 times the thrust of the first stage. The rocket's "Hungry Hippo" fairing system has also drawn attention for its novel design. But a setback emerged when a main-stage fuel tank ruptured during a pressure test. CEO Sir Peter Beck downplayed the incident, emphasizing that operational readiness matters more than fixed deadlines, and the maiden flight is still targeted for the fourth quarter of 2026.

On the financial side, Rocket Lab reported first-quarter revenue of $200.35 million, up 63% year over year, with a loss per share of $0.07 that edged past expectations. The company is also pursuing a roughly $8 billion acquisition of Iridium, which would add a global satellite constellation and recurring revenue streams. Yet that deal, along with the broader capital needs of Rocket Lab's vertical integration strategy, has fueled concern about cash burn. Insider selling has added to the pressure: over the past three months, company insiders sold 3.85 million shares worth a combined $362.8 million.

Wall Street remains cautious but not entirely bearish. Piper Sandler initiated coverage in mid-July with a neutral rating and a price target of $83, well below the broader analyst consensus of around $110. Beck himself offered a characteristically blunt take on the competitive landscape: of the more than 100 launch startups that have emerged, only two — Rocket Lab and SpaceX — have achieved regular flight operations. He called SpaceX a "friendly rival." The question for shareholders now is whether the operational wins can eventually outpace the market's current pessimism, or whether the stock's oversold condition is simply the new normal in a sector learning to live with higher volatility and lower scarcity.