Rocket Lab Corporation (NASDAQ: RKLB) has secured a $266 million contract from the U.S. Space Force to provide around a dozen suborbital launches, with an option for more.
This marks the largest launch contract award in the company’s history, with the first launch expected to take place by the end of 2026.
The deal adds to Rocket Lab’s growing defense portfolio, which already includes a $190 million Pentagon contract awarded earlier this year to support hypersonic flight testing.
Rocket Lab is also working with RTX Corp (NYSE: RTX) on the proposed Golden Dome missile defense initiative, further cementing its role in national security programs.
The backdrop for these wins is a global defense spending surge, with SIPRI reporting that worldwide military expenditure hit a record $2.9 trillion in 2025, a 2.9% increase from the prior year.
The space economy is expanding just as rapidly, with the Space Foundation reporting it reached $613 billion in 2024, while the World Economic Forum and McKinsey project it will surpass $1.8 trillion by 2035.
Rocket Lab has steadily transformed from a launch service provider into a broader space systems company, now offering spacecraft, payloads, satellite components, and mission operations support.
This expanded scope allows the company to capture a greater share of revenue from each customer program, reducing dependence on any single line of business.
Rocket Lab is also pursuing an acquisition of Iridium Communications, a move intended to further broaden its capabilities, though analysts note the deal introduces meaningful execution risk.
Hedge fund sentiment toward RKLB shifted in the first quarter, with the number of funds holding the stock dipping slightly to 43 from 45, though several major investors significantly increased their positions.
Marshall Wace raised its stake by 1,213% to $120.8 million, while Entropy Technologies increased its position by 317% to $14.8 million during the same period.
Tudor Investment Corp opened a new position of approximately $27.3 million in Rocket Lab during the first quarter, signaling fresh institutional confidence in the stock.
Short interest in RKLB stood at 45.8 million shares as of July 15, representing 8.65% of its float with 2.4 days to cover, suggesting limited bearish conviction among traders.
By comparison, Intuitive Machines (NASDAQ: LUNR) showed a short interest of 37.8 million shares, equal to 37.92% of its float, indicating considerably more skepticism from short sellers toward that name.
Investors weighing RKLB should balance its expanding defense and space footprint against real risks, including government funding uncertainty driven by defense budget politics and intensifying competition across the sector.
