Why Rocket Lab Stock Plummeted 36.1% Last Month But Is Soaring in August
Key Points
Rocket Lab's share price sank last month as investors became less willing to pay valuation premiums to own growth-dependent space stocks.
The company did deliver some good news for investors last month and has seen a substantial valuation recovery in August.
Rocket Lab's big valuation swings in recent months highlight the high-risk, high-reward dynamic of the stock.
- These 10 stocks could mint the next wave of millionaires ›
Rocket Lab (NASDAQ: RKLB) stock got crushed in July's trading and fell 36.1% across the stretch, according to data from S&P Global Market Intelligence. Over the same period, the S&P 500 was roughly flat, while the Nasdaq Composite declined 3.2%.
While there was little in the way of truly negative, business-specific news for Rocket Lab last month, the company's share price was caught up in a broader valuation pullback for space stocks. In addition to investors generally reducing exposure to the space industry, macroeconomic and geopolitical risk factors created an unfavorable backdrop for growth-dependent tech stocks.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
July was a tough month for space stocks
While valuation movements for major indexes were relatively modest last month, some categories of growth stocks saw dramatic pullbacks. Artificial intelligence hardware companies got most of the attention in headlines, but the space industry also suffered broad-based sell-offs.
Developments in June suggested that the Iran war could be winding down, but the conflict once again became more intense in July. The war has had a significant upward impact on oil prices, and investors reacted to the possibility that a protracted conflict would push inflation higher and cause the Federal Reserve to raise interest rates in response.
Trading trends for Space Exploration Technologies also appeared to continue having a negative impact on Rocket Lab and other space stocks last month. The company had its initial public offering (IPO) on June 12 and saw big valuation gains out of the gate, but it faced substantial bearish pressures in subsequent trading -- and pullbacks extended to the broader space industry. SpaceX stock fell roughly 36.6% in the month, closely mirroring Rocket Lab's valuation decline.
Despite the big valuation slide in July, Rocket Lab reported news in the month that showed the company was continuing to land new contracts and expand its relationships with existing partners. The company announced that it had won a $266 million contract with the U.S. Space Force, an expanded launch contract with the U.S. Space Force, and a contract to provide three additional launches to iQPS.
Rocket Lab stock has been soaring in August's trading
As of this writing, Rocket Lab's share price has risen 27.5% in August's trading. With the Nasdaq Composite up 5.2% across the stretch, the stock has benefited from a bullish backdrop at large -- but the company has also announced a significant new deal.
On Aug. 4, Rocket Lab published a press release stating that it had won a contract worth up to $397 million with the U.S. Space Force to provide technologies for a program using space-based technologies to detect and monitor airborne threats. The company will be developing, launching, and operating next-generation satellites that will provide low-latency, high-bandwidth data transmissions to the Space Force. The satellite launches are scheduled to use the company's Neutron rocket, and the performance of the new platform could have substantial implications for Rocket Lab stock.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $581,599!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $59,719!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $399,832!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
See the 3 stocks »
*Stock Advisor returns as of August 10, 2026.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
Recommended Articles
