Rocket Lab’s Leap in Europe Ignites Aerospace Stock Frenzy
New ESA contracts, record launches, and NATO support fuel a space rally
Rocket Lab (NASDAQ: RKLB), the dual‑listed Kiwi‑US aerospace firm on Nasdaq, has clinched a high‑profile contract with the European Space Agency to launch two “Pathfinder A” satellites for low‑Earth orbit navigation trials. This news propelled RKLB up over 9 % on Thursday and a further 1.3 % on Friday, reaching highs near $37.66.
The momentum rippled across related stocks: AeroVironment (NASDAQ: AVAV), a leader in defense drones, rallied more than 13 % following the U.S. unveiling of its $892.6 billion 2026 defense budget. Joby Aviation (NYSE: JOBY), the electric VTOL pioneer, climbed about 5 % on news of defense contracts and regulatory strides.
This surge comes amid broad geopolitical support, as NATO pledges to boost its defense spending to 5 % of GDP by 2035, with a significant portion directed to satellite and cybersecurity infrastructure.
Adding operational heft, Rocket Lab executed its 67th Electron mission—deploying HawkEye 360 satellites from New Zealand—then announced a record‑fast turnaround, scheduling its 68th launch within 48 hours.
Financially, RKLB posted Q1 revenue of $122.6 million (up 32 % YoY) but remained unprofitable, with backlog exceeding $1 billion. Analysts—from Needham, Morgan Stanley, Roth to KeyCorp—maintain “buy” or “overweight” ratings, with revised targets in the $32–$35 range.
Rocket Lab now stands as one of the top-performing space stocks—nearly +600 % year-over-year—with AVAV and JOBY riding alongside in what's shaping up as a broader “space rally.” However, valuation concerns persist, with RKLB trading well above industry averages.