Rocket Lab (RKLB) shares closed Friday at $135.76, up 8.2% on the day and 8.8% for the week, as the company secured a $90 million contract from the U.S. Space Force and successfully completed its ninth Electron rocket launch. The stock reached an intraday high of $139.76 before settling near record levels ahead of the Memorial Day holiday weekend.
Key Developments
The contract, awarded by the U.S. Space Force's Space Systems Command, calls for Rocket Lab to design, build, and operate two geostationary satellites equipped with Heimdall space-domain-awareness payloads. This marks Rocket Lab's first GEO satellite production deal, signaling a major expansion beyond launch services into full-service space systems. The company will serve as the prime contractor, overseeing spacecraft design, payload integration, launch coordination, and on-orbit operations for up to five years after commissioning.
In addition to the contract win, Rocket Lab completed its ninth Electron mission for Synspective, deploying a StriX Earth-observation satellite into orbit from its New Zealand launch site at 9:33 p.m. NZST on May 22. The mission brought Rocket Lab's total launch count to 88.
Market Context
U.S. markets will be closed Monday for Memorial Day, with trading resuming Tuesday. The broader market also showed strength: the Nasdaq Composite rose 0.2% on Friday and gained 0.5% for the week, while the Russell 2000 index jumped 2.7% over the same period. This marks the eighth consecutive weekly gain for U.S. stocks.
Rocket Lab's rally comes amid broader enthusiasm for space-related names. Shares of Intuitive Machines ended Friday up 11.7%, and AST SpaceMobile gained 10.0%, reflecting sector-wide momentum fueled by anticipation of a potential SpaceX listing.
Share Sale Plan Raises Dilution Concerns
Despite the positive news, Rocket Lab's filing to sell up to $3 billion in new shares through an at-the-market equity offering has tempered some investor enthusiasm. The company can issue shares gradually through sales agents and may enter forward-sale agreements. Analysts note that such dilution could weigh on earnings per share and potentially cap the stock's upside.
Rocket Lab remains unprofitable, reporting a first-quarter net loss of $45.0 million, though revenue reached a record $200.3 million. The company also reported a record backlog of $2.2 billion and guided for second-quarter revenue between $225 million and $240 million. CEO Sir Peter Beck stated, "Rocket Lab's tailwinds are strong," highlighting the company's involvement in "significant space programs."
Outlook
The $3 billion facility is expected to fund Rocket Lab's Neutron rocket development and other growth initiatives. However, traders are divided on whether the stock can sustain its rally given the dilution risk. With markets closed Monday, investors will have an extra day to assess the implications before trading resumes Tuesday.
