3 Reasons Rocket Lab Stock Could Double in 2027 -- and 1 Reason It Might Not

Rocket Lab (NASDAQ: RKLB) has quickly become one of the more interesting names in the space race. With several growth drivers ahead, the company has many reasons to deliver huge upside. Below are three catalysts that could send the stock sharply higher by the end of 2027, along with the one risk that could hold it back.

Image source: Getty Images.

Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »

Rocket Lab is becoming a serious defense player

One of the more interesting parts of the Rocket Lab investment case is its growing exposure to defense spending around space. For example, the company has already secured more than $1.3 billion of Space Development Agency awards to build and operate military satellite constellations.

The company is also developing satellites with internally manufactured components. That vertical integration, which means Rocket Lab builds many of its own parts rather than relying on outside suppliers, could be an edge. Rather than simply selling launches, it can offer governments a complete package covering satellites, payloads, and space infrastructure.

Plus, the company's Haste platform gives it exposure to hypersonic missile testing and research, while the new Ghost launch system is expected to begin operations from Alaska in 2027. With that, it is participating in several of the biggest themes in defense all at once: missile defense, satellite networks, and space infrastructure for national security.

But while defense is turning into a key growth driver, the company has an even bigger catalyst in the pipeline.

The Neutron could open a much larger market

Rocket Lab's most exciting potential catalyst is still the Neutron, its reusable medium-lift rocket. Electron, the company's small-lift rocket, established the business as a credible launch provider, but the Neutron could move the company into a much larger and potentially more lucrative market. On top of that, it could even open doors to national security missions and launch major satellite constellations.

Management is already seeing demand even before the Neutron's launch. For example, the company has secured several commitments, including a major 2026 agreement covering five Neutron launches. And it signed a $397 million Space Force contract under which it will provide both spacecraft and launch services.

That said, a successful Neutron program wouldn't simply add another rocket to the lineup. Instead, it could allow the company to secure larger contracts. And it isn't the only thing working in Rocket Lab's favor right now.

The existing business keeps getting stronger

Even before the Neutron takes flight, the company has been performing strongly. In the second quarter of 2026, revenue reached a record $235 million, up 62% year over year, while its backlog reached a record $2.4 billion. On top of that, it secured more than $1 billion of additional contracts across launch and space systems around the start of the third quarter.

Launches of the Electron also continue to ramp up. For example, the Japanese company Synspective's September mission was its 96th overall Electron launch and 17th mission of 2026.

That's a third reason to be optimistic about Rocket Lab in 2027, and it provides a cushion in case the Neutron runs into problems. However, that cushion doesn't erase the single biggest risk to the investment case.

Neutron's first flight could still be at risk

The biggest obstacle is execution around the Neutron. Rocket Lab was previously eyeing a 2026 debut, but by August, the company was targeting delivery of the rocket to the launchpad in the fourth quarter rather than committing to a first flight. As a result, that could signal a potential delay.

Still, that doesn't change the long-term thesis. In fact, the company has already proved that customers are willing to commit to the Neutron even before its first launch. But a successful first launch, followed by reliable operations and a consistent launch cadence, would be crucial for the stock to outperform in 2027.

That tension, between a core business that's firing on all cylinders and a rocket program still finding its footing, is exactly what investors need to weigh.

Is the stock a buy right now?

The case for owning the stock is only getting stronger. Expanding defense contracts, a growing launch business, and the Neutron's first flight give the company several paths to growth. That said, the catch is that execution around Neutron still matters. Looking ahead, if Rocket Lab delivers on its ambitious road map, shares could realistically climb toward twice their current value by 2027.

Rick Orford 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.