Cathie Wood Sells Rocket Lab (RKLB) Stock Rally – One Top Analyst Thinks It’s a Mistake

Rocket Lab (NASDAQ:RKLB) stock has been on an absolute tear during the past two trading sessions, surging 49% after the aerospace and defense company delivered record quarterly revenue, issued guidance well above Wall Street expectations, and revealed that launch demand continues accelerating. Management also announced its largest launch agreement so far, including multiple Neutron and Electron missions scheduled over the coming years, while the company continues expanding its defense and government operations.

The latest rally also reflects growing confidence that Rocket Lab is evolving far beyond a niche satellite-launch company into one of the most important commercial space and defense platforms outside of SpaceX. Demand for defense-related space capabilities has accelerated significantly, with Rocket Lab securing hypersonic testing agreements, expanding work with the U.S. Space Force, and continuing development of its reusable Neutron rocket, which many investors view as the company’s gateway into much larger contracts and missions. That broader transformation helps explain why RKLB shares have skyrocketed 452% over the past year.

Interestingly, the rally also triggered some profit-taking from growth investor Cathie Wood. Over the past two trading sessions, Wood sold 220,641 RKLB shares through her ARKQ and ARKX ETFs, with the position valued at ~$26 million based on current prices.

That move from Cathie Wood comes as at least one Wall Street analyst believes Rocket Lab’s opportunity may still be far larger than investors currently appreciate.

Following the quarterly report, Craig-Hallum analyst Jeff Van Rhee, who ranks among the top 3% of analysts tracked by TipRanks, upgraded RKLB shares to Buy. (To watch Van Rhee’s track record, click here)

Van Rhee came away highly impressed by the company’s latest results, describing the quarter as “hammered” on both the top and bottom lines while emphasizing that backlog growth and launch demand remain far stronger than many expected. The analyst also argued that “the launch market is starved of capacity,” which he believes creates an attractive opening for Neutron as competing heavy-lift vehicles continue encountering delays and operational problems.

The analyst also sees significant upside coming from Rocket Lab’s hypersonics exposure through Electron and HASTE. Van Rhee says that “the depth of this demand is being greatly underestimated,” particularly as Western governments ramp up spending tied to defense and missile technologies. The analyst added that Rocket Lab possesses “unique capabilities as a test bed” and thinks “a wave of demand” could emerge for the platform during the coming years.

Beyond launches, Van Rhee believes Rocket Lab is becoming a far more meaningful defense and space infrastructure company than many investors currently realize. The analyst described the company’s Space Systems business as “an incredibly impressive collection of capabilities” while arguing that Rocket Lab appears exceptionally well-positioned for opportunities connected to Golden Dome, NASA, Space Force, and sovereign defense programs. According to the analyst, “the magnitude of what is to come” may prove “quite a bit larger” than previously appreciated.

Van Rhee did acknowledge the risks surrounding Rocket Lab’s ambitious expansion plans, cautioning that developing Neutron will likely involve delays, setbacks, and higher spending requirements over time. Still, he argued that those challenges apply across the launch industry and stated that he sees Rocket Lab as “likely winners next to SpaceX” as the commercial space market continues expanding.

That optimism, however, is far from unanimous on Wall Street. Based on 10 Buys and 4 Holds, RKLB currently carries a Moderate Buy consensus rating. Yet, after the stock’s enormous run, the average 12-month price target currently stands at $96.25, which implies ~18% downside from current levels. (See RKLB stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.