Growing geopolitical tensions are fueling a global arms race. According to SIPRI, global military spending hit a record $2.9 trillion in 2025, an increase of 2.9% from the previous year. Meanwhile, the Space Foundation reported that the global space economy reached $613 billion in 2024. Separately, the World Economic Forum and McKinsey projects that the space economy is on track to surpass $1.8 trillion by 2035.
These trends cast the spotlight on the expanding business opportunities for defense and space technology companies. Rocket Lab Corporation (NASDAQ:RKLB), with its broadening portfolio and programs, looks well-positioned to capture those opportunities. Its contract with the U.S. Space Force highlights its expanding role in national security space missions.
Rocket Lab Lands Space Force Contract
Rocket Lab 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 is the company’s largest launch contract award ever. The first launch is expected to take place by the end of 2026.
The award also confirms Rocket Lab’s growing relationship with U.S. defense customers. Earlier this year, the Pentagon awarded the company a $190 million contract to support hypersonic flight testing. Rocket Lab is also working with Rtx Corp (NYSE:RTX) on the proposed Golden Dome missile defense initiative.
Starting off as a launch service provider, Rocket Lab has steadily transformed its business to become a broader space systems provider. Aside from offering launch services, the company supplies spacecraft, payloads, and satellite components. It also supports mission operations. The expanded scope allows Rocket Lab to capture a greater share of each customer program.
Rocket Lab looks to broaden its business even further and bolster its capabilities with its planned acquisition of Iridium Communications.
Hedge Funds Show Mixed Sentiment Toward Rocket Lab
Elite investors adjusted their exposure to Rocket Lab (NASDAQ:RKLB) during the first quarter. The number of hedge funds holding Rocket Lab shares dropped slightly to 43 from 45 the previous quarter. But that was offset by several funds materially increasing 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. Tudor Investment Corp added Rocket Lab to its portfolio during Q1, opening a position of about $27.3 million.
By comparison, Intuitive Machines (NASDAQ:LUNR)’s hedge fund holders increased to 30 from 28 in the previous quarter.
Regarding bearish sentiment, not many short sellers are willing to bet on Rocket Lab stock’s decline. The stock had 45.8 million shares sold short as of July 15, representing 8.65% of its float with 2.4 days to cover. Intuitive Machines’ shorted shares stood at 37.8 million, equal to 37.92% of its float, with 3.8 days to cover.
Is Rocket Lab Strengthening Its Position in National Security Space?
Rocket Lab (NASDAQ:RKLB)’s record Space Force contract, building on the existing Pentagon award, highlights its growing importance to U.S. national security programs. The company’s diversified portfolio position it well to capture a growing share of defense and space spending.
Despite these opportunities, investors should also consider the risks. These include government funding uncertainty due to defense budget politics and intensifying competition. Also, the acquisition of Iridium Communications introduces execution risks.
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