Why Rocket Lab Stock Surged 173.9% Last Year and Has Kept Rallying in 2026
Key Points
Rocket Lab accelerated its pace of launches and posted strong sales growth last year.
The company's share price got a big boost from news that SpaceX could go public in 2026 at a $1.5 trillion valuation.
The demand outlook among public-sector and private-sector customers is strong, and many analysts raised their price targets on the stock.
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Rocket Lab (NASDAQ: RKLB) stock posted explosive gains in 2025 trading. The company's share price surged 173.9% higher last year, according to data from S&P Global Market Intelligence.
With the S&P 500 up 16.4% and the Nasdaq Composite up 20.4% across the stretch, Rocket Lab benefited from a bullish backdrop for growth stocks. The company's share price also saw big gains in conjunction with impressive sales growth, new deals and partnerships, and news that SpaceX is set to go public this year.
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Rocket Lab was one of 2025's hottest stocks
Excitement surrounding space-tech stocks continued to rise last year, and Rocket Lab was one of the category's biggest winners. The company's share price marched higher through the first half of the year thanks to solid quarterly results, analyst ratings upgrades, price-target increases from analysts, and the announcement of successful launches.
In November, the company published third-quarter results that came in well above Wall Street's expectations. The business posted revenue of $155 million in the period, topping the average analyst estimate's call for sales of $152 million. Revenue was up 48% year over year in the period, and Rocket Lab closed out the quarter with contracts for 49 additional launches and record backlog value. The company also issued guidance for sales to be between $170 million and $180 million in the fourth quarter, beating Wall Street's target for sales of $172 million.
The stock got another big boost in December following news that SpaceX plans to have its initial public offering (IPO) near the end of 2026. SpaceX is reportedly looking to raise roughly $30 billion in funds through stock sales that would value the company at roughly $1.5 trillion.
While Rocket Lab and SpaceX are competitors in the launch-services category, news that the latter company could go public at such a massive valuation created bullish momentum for many space-industry stocks. With SpaceX potentially commanding a $1.5 trillion market capitalization, investors became willing to assign higher valuation multiples to Rocket Lab.
Rocket Lab stock has kept soaring in 2026
Rocket Lab stock has continued to skyrocket in 2026 and is currently up 38% year to date. Meanwhile, the S&P 500 is up 1.4%, and the Nasdaq Composite is up 1.2%.
Rocket Lab stock has continued to receive positive coverage from analysts. On Jan. 16, Morgan Stanley upgraded its rating on Rocket Lab from equal weight to overweight and raised its price target on the stock from $67 per share to $105 per share and cited an increased launch frequency and a favorable backdrop for space industry valuations as reasons for the move.
Rocket Lab's share price has also gotten a boost from geopolitical volatility. With countries around the world ramping up their defense budgets and increasing bets on space tech as a critical defense component, the company could be poised to benefit from surging government spending.
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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.
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