What Happened?
Shares of aerospace and defense company Rocket Lab (NASDAQ:RKLB) jumped 5.6% in the afternoon session after analyst commentary highlighted the company's record third-quarter revenue and potential for significant government contract work. The launch provider recently reported its highest-ever quarterly revenue of $155 million, a figure that beat Wall Street estimates and represented year-over-year growth of more than 48%. The company also posted a smaller-than-expected loss per share. Following the strong results, Cantor Fitzgerald maintained its Overweight rating and a $72 price target on the stock. Analysts pointed to the company's substantial $1.1 billion backlog and potential for future growth from government contracts. Rocket Lab was working on a $515 million contract with the U.S. Space Development Agency and bidding on another project for the agency worth up to $900 million.
The shares closed the day at $44.68, up 6.7% from previous close.
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What Is The Market Telling Us
Rocket Lab’s shares are extremely volatile and have had 71 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 7.5% on the news that markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts.
While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%. This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.
Rocket Lab is up 79.3% since the beginning of the year, but at $44.75 per share, it is still trading 35.4% below its 52-week high of $69.27 from October 2025. Investors who bought $1,000 worth of Rocket Lab’s shares 5 years ago would now be looking at an investment worth $4,453.
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