Why Rocket Lab Stock Bounced Back on Friday

Source The Motley Fool

Rocket Lab (NASDAQ: RKLB) shareholders received some wonderful news Thursday night when the U.S. Department of Defense announced that the company, along with privately held Stoke Space, had been added to "Lane 1" of Phase 3 of the National Security Space Launch program by U.S. Space Force.

In response, Rocket Lab stock soared by more than 7% in the opening minutes of trading Friday before retreating to about a 3.5% gain as of 10:05 a.m. ET.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

More good news for Rocket Lab

In its own press release, Rocket Lab clarified that NSSL Phase 3 Lane 1, or NSSL3(1), is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract worth up to $5.6 billion for Rocket Lab if it wins all of the contracts on offer over the five-year period ending June 2029. In other words, NSSL3(1) is an umbrella contract that states the total amount of money up for grabs and lists all the space companies that can bid on the contracts to fulfill individual launches and be paid for them.

Rocket Lab now shares this list with Stoke Space, Blue Origin, United Launch Alliance, and SpaceX. A minimum of 30 launches are anticipated under NSSL3(1).

So Rocket Lab can bid on the individual launches. Before it can conduct launches under NSSL3(1), however (and be paid for them), it first needs to receive national security certification for its new Neutron rocket, which will require at least two successful launches.

Close-up view of engine firing at Electron rocket launch from LC-1 in New Zealand.

Image source: Rocket Lab.

Is Rocket Lab stock a buy?

Management anticipates the first launch of Neutron will occur in the second half of this year, with a second launch sometime in 2026. The company will be paid $5 million up front to help it cover the costs of earning certification for the Neutron.

In the best case, this means investors should expect the first money from this umbrella contract to start arriving probably no sooner than mid-2026. Assuming all goes well, though, this will help Rocket Lab achieve analysts' consensus target of $895 million for its 2026 revenue, and potentially help it generate nearly $84 million in positive free cash flow.

Should you invest $1,000 in Rocket Lab USA right now?

Before you buy stock in Rocket Lab USA, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rocket Lab USA wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $682,965!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 24, 2025

Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD drifts lower below $2,800   after Trump imposes tariffsGold price (XAU/USD) edges lower to around $2,795 during the early Asian session on Monday.
Author  FXStreet
Feb 03, Mon
Gold price (XAU/USD) edges lower to around $2,795 during the early Asian session on Monday.
placeholder
U.S. March Nonfarm Payroll Preview: Even If Data Aligns with Expectations, Financial Markets May Not Escape the Fate of VolatilityOn 4 April 2025, the United States will release its March Nonfarm Payrolls (NFP) data. The market consensus currently anticipates job growth of 128,000, a decline from February’s 151,000 (Figure 1). W
Author  TradingKey
Apr 02, Wed
On 4 April 2025, the United States will release its March Nonfarm Payrolls (NFP) data. The market consensus currently anticipates job growth of 128,000, a decline from February’s 151,000 (Figure 1). W
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Gold Price Forecast: XAU/USD attracts some sellers below $3,250 on firmer US DollarThe Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
Author  FXStreet
Yesterday 02: 14
The Gold price (XAU/USD) extends the decline to around $3,245 during the early Asian session on Thursday. The precious metal edges lower to near a two-week low amid easing US-China trade tensions and stronger US Dollar (USD) demand. 
placeholder
Ripple Price Forecast: XRP builds bullish momentum as Ripple eyes Circle with $5B acquisition bidRipple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
Author  FXStreet
18 hours ago
Ripple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
goTop
quote