Rocket Lab's HASTE Is Flying Hypersonic Missions for the Pentagon. Here's the Defense Business Hiding Inside a Space Stock.

Exciting developments are happening for Rocket Lab (NASDAQ: RKLB), which recently secured some new defense contracts for its innovative Hypersonic Accelerator Suborbital Test Electron (HASTE) launch vehicle.

By positioning itself as a partner in the United States' national security efforts, Rocket Lab is building a profitable defense business that stabilizes earnings as it evolves into a trust defense contractor.

Let's take a closer look at Rocket Lab's defense business hidden inside the space stock, and why this part of the overall business is a positive sign for long-term investors.

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Rocket Lab scored some big defense contracts in 2026

Hypersonic testing has become a priority for the Pentagon and a key component of national security. Hypersonic systems travel faster than Mach 5 and maneuver within the upper atmosphere. Historically, the Pentagon has relied on ground testing or repurposed missiles for flight testing, but both have limitations compared to real-world flight testing.

Rocket Lab's HASTE has emerged as a preferred suborbital test platform. This vehicle uses a carbon-composite structure and 3D-printed engines and is built on Rocket Lab's flagship launch vehicle, Electron. HASTE has a repeatable flight cadence, allowing the military to test and simulate threat scenarios under real-world flight conditions rather than relying solely on computer models.

Because it primarily operates out of NASA's Virginia facility, the company can achieve a quick turnaround, integrating and launching its vehicle within months rather than years.

Earlier this year, Rocket Lab signed a $190 million, 20-launch agreement with the Pentagon, working alongside Kratos as part of its MACH-TB (Multi-Service Advanced Capability Hypersonic Test Bed) program, which aims to eliminate bottlenecks in hypersonic flight testing. Building on this, in late June, the U.S. Space Force awarded Rocket Lab a $266 million contract for up to 18 suborbital missile defense launches -- the largest launch contract in Rocket Lab's history.

To execute these suborbital launches, Rocket Lab has introduced its GHOST technology. GHOST packages rocket launch infrastructure, range control systems, and ground support into standard shipping containers, giving Rocket Lab flexibility to set up launch sites in remote regions on accelerated timelines.

Rocket Lab's satellites and space component business are also winning defense contracts

Beyond its launch vehicle, Rocket Lab also has a booming space systems business. Here, the company provides key components and services for space-related infrastructure, such as satellites, flight software, and high-performance space components. Given the growing importance of space for national security, this gives Rocket Lab another avenue for growth.

In August, Rocket Lab won a massive $397 million contract with the U.S. Space Force to design, build, launch, and operate multiple advanced Flatellite spacecraft, flat satellites optimized for large constellations. The award is part of the Space-Based Airborne Moving Target Indicator (SB-AMTI) program, and shows how Rocket Lab's vertically integrated approach to the space economy is paying off.

Beyond this, Rocket Lab has partnered with RTX's Raytheon to demonstrate advanced space-based missile tracking and interception capabilities as part of the Golden Dome Space-Based Interceptor (SBI) program. Viasat also recently selected Rocket Lab to build a satellite bus for the Space Force's Protected Tactical SATCOM-Global (PTS-G) program.

Rocket Lab's defense pivot adds stability to its business

Rocket Lab's pivot into defense turns the company from a commercial space company to a broad-based defense and aerospace provider. Historically, launch-only providers suffer from irregular revenue recognition and cyclical launches.

By securing government contracts, Rocket Lab diversifies away from commercial timelines and expands into government-backed projects, which tend to have large dollar amounts over long time horizons. Rocket Lab's integrated platform also lets it bid aggressively on government contracts while maintaining strong profit margins.

Looking ahead, Rocket Lab continues expanding with its $8 billion acquisition of Iridium Communications. This gives Rocket Lab access to a 66-satellite constellation, 2.5 million subscribers, and L-band spectrum. This spectrum provides weather-resilient tactical communications and an alternative to GPS, which can be jammed by modern electronic warfare.

Rocket Lab has grown its platform at an impressive pace in recent years, building on its launch capabilities and expanding its space components business while securing major defense and national security contracts. For investors seeking upside in the expanding space economy and growing defense budgets, Rocket Lab is a top space stock to own over the long term.

Courtney Carlsen has positions in Rocket Lab. The Motley Fool has positions in and recommends Kratos Defense & Security Solutions, RTX, and Rocket Lab. The Motley Fool has a disclosure policy.