Rocket Lab Stock: Defense Contracts Pile Up as Space Force Quadruples Spending Ceiling

Rocket Lab benefits from US Space Force tripling its launch contract cap to $17B and a separate $266M Air Force deal, though stock remains 53% below highs.

Rocket Lab has been on a wild ride this month, but a pair of government contract developments are giving investors something to focus on beyond the stock’s brutal selloff. The US Space Force has dramatically expanded its procurement ceiling for launch services, and Rocket Lab — one of seven approved vendors — stands to benefit from the larger pool of available dollars.

The Space Force announced on July 17 that it had raised the maximum value of its “National Security Space Launch Phase 3 Lane 1” contract from $5.6 billion to $17 billion, a tripling of the original cap. The framework agreement governs how much the service can spend on individual launch contracts through fiscal year 2029. Rocket Lab competes alongside SpaceX, United Launch Alliance, Blue Origin, Stoke Space, Impulse Space and Relativity Space for those missions.

Lane 1 covers the commercially oriented portion of the procurement program, handling missions that don’t require full military certification. Rocket Lab and Stoke Space were added to the approved vendor list in 2024 through a backfill process, after the Space Force initially selected only Blue Origin, SpaceX and ULA.

The expansion follows a similar increase in the more complex Lane 2 segment. In April, the Space Systems Command added 25 missions beyond the 54 originally planned over five years. Industry observers see both moves as evidence that military launch demand has grown significantly since the initial planning phase.

Just days after the Space Force announcement, Rocket Lab secured a separate $266 million contract from the US Air Force for suborbital launch services. The deal covers 12 launches from the Pacific Spaceport Complex in Alaska, with options for six additional missions, and runs through the end of 2028.

Investors should note that inclusion in the Space Force contract framework only grants the right to bid on future individual missions — no money changes hands at the time of the ceiling increase. The higher cap represents expanded opportunity, not guaranteed revenue.

The stock gained 3.29% on Wednesday to €62.80 in European trading, following a close of €60.80 the previous day. That modest bounce does little to change the bigger picture. Shares remain 53% below their 52-week high of €133.80 from May 27, and have lost 28.5% over the past 30 days alone.

The broader space sector has been hammered in July. Beyond Rocket Lab, both AST SpaceMobile and SpaceX have shed over 30% of their value this month as the post-IPO euphoria gives way to profit-taking. Goldman Sachs notes that its own basket of space and satellite stocks is roughly five times more volatile than the S&P 500 — a metric that fits Rocket Lab’s annualized 30-day volatility of 93.7%.

The 14-day RSI sits at 35.6, signaling oversold conditions that suggest the recent downward pressure may have been overdone. On Stocktwits, retail sentiment around the ticker RKLB remained “bullish” despite the heavy news flow.

Year-to-date, the stock is up just 2.1%, masking the violent swings of recent months. Over the trailing 12 months, the gain stands at roughly 57% — a reminder of how far the shares have fallen from their May peak.

All of this unfolds against the backdrop of Rocket Lab’s far larger transformation: the roughly $8 billion acquisition of satellite operator Iridium Communications, announced in late June. Management has positioned the deal as a step toward a fully vertically integrated space company spanning launch, satellite manufacturing and orbital communications. The defense contracts land at a time when the company is juggling that massive integration alongside the market’s demand for near-term results.