Rocket Lab’s Neutron Rocket Faces Development Hurdle After Test Anomaly

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Rocket Lab USA finds itself navigating a familiar aerospace dichotomy: steady operational success against the backdrop of ambitious, risky development. The company's core launch business continues its reliable performance, but a recent structural failure during testing of its next-generation Neutron rocket has introduced fresh uncertainty into its growth timeline.

Even as questions swirl around its new rocket, Rocket Lab's established operations are firing on all cylinders. On January 21, 2026, the company successfully completed its first mission of the year, deploying two satellites to orbit. This marked the 80th flight of its workhorse Electron rocket, underscoring a track record of reliability.

This operational strength and a robust order book recently prompted analysts at Morgan Stanley to upgrade the company's rating to "Overweight." Furthermore, the "ESCAPADE" mission to Mars remains on schedule, with the spacecraft positioned for its planned trajectory correction maneuver this coming November.

A Setback in Neutron Development

The source of investor concern emerged from a separate event also dated January 21, 2026. At a test facility in Maryland, a hydrostatic pressure test on the first-stage tank for the new Neutron rocket resulted in a tank rupture. Company officials clarified that such tests are explicitly designed to push structures to their limits, validating safety margins and identifying failure points before flight.

On a positive note, the test facility itself sustained no significant damage, and a replacement tank is already in production. While such anomalies are considered a normal part of the aerospace qualification process, their occurrence in the critical phase leading up to a debut launch draws heightened scrutiny.

Timeline Implications and Market Reaction

This incident potentially jeopardizes the Neutron rocket's inaugural launch, currently targeted for the first half of 2026. Market experts at TD Cowen have noted that a delayed debut could make a second launch within the same calendar year increasingly unlikely.

Despite this near-term uncertainty, the market appears to be weighing the long-term perspective. Rocket Lab's shares have still gained over 200% in the last 12 months, even as they trade somewhat below their 52-week high of $96.30.

All Eyes on the Forthcoming Update

The investment community's focus now shifts decisively to February 26, 2026. When Rocket Lab releases its fourth-quarter earnings after the market closes, management will be expected to provide a concrete update on the Neutron program's revised schedule. This communication will be pivotal in shaping whether the recent test anomaly is viewed as a standard development hurdle or a significant setback in the company's competition with rivals like SpaceX.