Rocket Lab Shares Rally on Engine Milestone as $8 Billion Iridium Deal Reshapes the Narrative

Rocket Lab stock gains 1.88% after Archimedes engine test. Shares 47% below high, but $8B Iridium deal and Neutron progress are catalysts.

A critical step forward for Rocket Lab’s next-generation rocket has given the stock a brief respite from a punishing sell-off. On Wednesday, the company completed a full-duration hot-fire test of its Archimedes vacuum engine — the powerplant designed for the upper stage of the Neutron launch vehicle — and shares responded by climbing 1.88 percent to €70.40. The move snapped a six-day losing streak and nudged the relative strength index to 37.8, a level that is flirting with oversold territory but still reflects the market’s caution.

The modest gain does little to mask the scale of the recent retreat. Over the past 30 days, Rocket Lab’s stock has dropped 25.42 percent and now sits 47.38 percent below the 52-week high of €133.80 set on May 27. The fall has brought the shares close to their 200-day moving average of €67.32 — a level that, according to Schaeffer’s Investment Research, has historically acted as a springboard. In 80 percent of the five prior instances where the stock tested that line, it rallied an average of 37.1 percent over the following month. Whether that pattern repeats this time hinges on how investors digest the company’s most audacious strategic pivot yet.

Just two weeks before the engine test, Rocket Lab signed a binding agreement on June 29 to acquire Iridium Communications in a cash-and-stock transaction valued at roughly $8 billion. Under the terms, Iridium shareholders will receive $27.00 in cash plus Rocket Lab shares for each of their shares, with the deal expected to close by mid-2027 pending regulatory and shareholder approval. The acquisition would fold Iridium’s constellation of 80 cross-linked low-Earth-orbit satellites — along with its 2.55 million active subscribers — into Rocket Lab’s existing launch and satellite manufacturing business, creating what the company describes as a vertically integrated space platform.

Morgan Stanley reaffirmed its “Overweight” rating on July 8 and raised its bull-case price target, citing the growing resemblance between Rocket Lab and integrated aerospace giants that generate recurring service revenue from proprietary infrastructure. The bank’s analysts see the Iridium deal as a catalyst that could transform Rocket Lab’s revenue mix and long-term valuation.

Meanwhile, the day-to-day business continues to move forward. The company is working to complete 18 spacecraft for the U.S. Space Development Agency, with deliveries scheduled to begin in mid-2027. It also recently finished the VICTUS-HAZE mission for the U.S. Space Force ahead of schedule — a test of rapid-response satellite operations that the military views as critical for threat tracking. On the launch side, the Neutron rocket remains on track for its maiden flight by the end of 2026, a milestone that the Archimedes vacuum engine test de-risks further. Rocket Lab called the test a critical preparation step for that first flight.

The financial picture shows a company still in investment mode. At the end of the first quarter, Rocket Lab held roughly $1.48 billion in cash and marketable securities, with access to more than $2 billion in total liquidity. Revenue for the quarter reached $200.3 million, led by the Space Systems segment at $136.7 million, while Launch Services contributed $63.7 million. The order backlog hit a record $2.2 billion. Yet profitability remains elusive: the company posted a GAAP net loss of $45 million and an adjusted EBITDA loss of $11.8 million. The market cap currently stands at the equivalent of €44.36 billion, with 30-day annualized volatility above 94 percent.

The next concrete catalyst for the stock is the Neutron debut in late 2026. Until then, the twin forces of the Iridium integration — which will test investor patience through mid-2027 — and the company’s ability to keep bleeding red ink while scaling up will determine whether the 200-day moving average turns out to be a floor or just another waypoint on a longer descent.