Needham Sees Upside in Rocket Lab Post-Geost Deal, Hikes Price Target

Needham reaffirmed its Buy rating on Rocket Lab USA, Inc. (NASDAQ:RKLB) and increased its price target from $28 to $32 on May 28. The adjustment was announced following the news that Rocket Lab will acquire Geost LLC, a company specializing in infrared and electro-optical payloads for national security.

The two companies share a defense clientele, which includes the Space Force, the U.S. Air Force, and the Space Development Agency (SDA). Notably, Rocket Lab USA, Inc. (NASDAQ:RKLB) agreed to acquire Geost at a purchase price of $275 million, with $125 million in cash and $150 million in RKLB shares, along with the possibility of an additional $50 million in cash earn-outs.

Needham views the acquisition as a major step for Rocket Lab USA, Inc. (NASDAQ:RKLB), boosting its position as a leading defense and aerospace contractor. According to the firm, Rocket Lab’s enhanced position could prove essential as it competes for a number of government projects, including the Golden Dome project.

While we acknowledge the potential of RKLB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than RKLB and that has 100x upside potential, check out our report about the cheapest AI stock.

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