Rocket Lab (RKLB) Stock Surges as Company Secures $816 Million Space Development Contract

TLDR

• Rocket Lab won an $816 million contract to build 18 missile defense satellites for the U.S. Space Development Agency
• The company launched its 21st Electron rocket of 2025 on December 21, deploying a satellite for Japanese firm iQPS
• Combined SDA contracts now total over $1.3 billion, marking Rocket Lab’s growing defense portfolio
• Stock rose 5% in pre-market trading after the announcement, extending year-to-date gains to 177%
• Stifel upgraded price target to $85, citing the contract as a meaningful milestone for the company

Rocket Lab shares jumped 5% in pre-market trading December 22 after announcing an $816 million contract with the U.S. Space Development Agency. The deal represents the company’s largest single award.

Rocket Lab USA, Inc., RKLB

The contract requires Rocket Lab to build 18 satellites equipped with missile warning and tracking sensors. These satellites will join the Tracking Layer Tranche 3 program within the Proliferated Warfighter Space Architecture.

The base contract is worth $806 million. Options could add another $10.45 million to the total value.

This win follows a previous $515 million SDA contract for 18 satellites under the Transport Layer-Beta Tranche 2 program. That program focuses on secure communications for defense operations.

The two contracts push Rocket Lab’s total SDA business past $1.3 billion. The company highlighted this figure as proof of its capability to deliver on complex national security missions.

Electron Rocket Maintains Steady Launch Pace

The day before the contract news, Rocket Lab completed its 21st Electron launch of the year. The mission carried a satellite for Q-shu Pioneers of Space, Inc., an Earth-imaging company based in Japan.

Rocket Lab has launched seven satellites for iQPS since first working with the company in 2023. Electron serves as the primary launch vehicle for the imaging firm.

Five additional iQPS missions are scheduled beginning in 2026. The ongoing partnership demonstrates customer confidence in Rocket Lab’s launch reliability.

Wall Street Reacts to Contract News

Stifel analyst Erik Rasmussen increased his price target for RKLB from $75 to $85. He kept his Buy rating intact.

Rasmussen described the SDA contract as “another meaningful win” for Rocket Lab. He emphasized the size of the award relative to the company’s previous contracts.

The stock has climbed 177% year-to-date before Monday’s pre-market gains. The rally reflects multiple contract wins and successful mission execution throughout 2025.

Nine analysts rate the stock a Buy while four recommend holding. The consensus rating stands at Moderate Buy across Wall Street research firms.

The average price target among analysts is $66. That target implies downside from current trading levels after the stock’s strong performance this year.

Neutron Development Timeline Approaches

Rocket Lab’s reusable Neutron rocket is slated for its inaugural launch in early 2026. Industry observers view the vehicle as a key next step for the company’s growth strategy.

The company operates in both satellite manufacturing and launch services. This dual approach provides exposure to multiple revenue streams within the space sector.

Rocket Lab’s market capitalization reached $37.67 billion. Daily trading volume averages 22.7 million shares.

The December 21 Electron mission marked the 21st launch of 2025. The launch frequency underscores operational capacity and mission readiness for commercial and government customers.

The company delivered all seven iQPS satellites using its Electron platform. The partnership highlights Rocket Lab’s position as a go-to provider for small satellite launches in the commercial market.

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