The Pentagon Is Betting on a Rocket That Hasn’t Flown Yet
Rocket Lab Corporation (NASDAQ:RKLB) continues to strengthen its presence in the defense sector. On August 4, the company won a $397 million U.S. Space Force contract to develop and operate satellites for a next-generation airborne target-tracking system. The award further strengthens Rocket Lab’s position in the national security space market. At the same time, the contract underscores a significant execution risk. Those satellites are scheduled to launch using Neutron, the company’s next-generation rocket. However, the rocket has yet to make its first flight after facing multiple delays and is now expected to debut in late 2026. The opportunity is significant, but it is tied to a rocket that has not yet flown.
A $397 Million Pentagon Bet Before Neutron’s Debut
On August 4, Rocket Lab announced that it had been awarded a $397 million U.S. Space Force contract under the Space-Based Airborne Moving Target Indicator (SB-AMTI) program to launch, develop, and operate multiple Flatellite satellites while allowing for additional spacecraft under the contract’s overall value. The Flatellite platform features a flat-panel design optimized for large constellations and is equipped with space-based sensors and low-latency communication capabilities.
Beyond manufacturing the satellites, the company will manage their operations from secure facilities and provide tracking data to the Space Force. The award further reinforces Rocket Lab’s growing portfolio of government work, which already includes projects for NASA, Space Force, DARPA, and the National Reconnaissance Office.
Peter Beck, Rocket Lab founder and CEO, commented:
Rocket Lab is honored to play a key role in the SB-AMTI program, which is critical to expanding the Space Force’s layered, resilient tracking architecture.
A Major Contract, But Neutron Remains The Wild Card
Although the contract represents an important win, it also depends on Neutron, which is expected to launch the Flatellite constellation. However, the rocket’s first flight has now been delayed until the fourth quarter of 2026 following a Stage 1 tank failure linked to a third-party hand layup defect. The delay has fueled concerns about the launch schedule and its impact on investor sentiment.
Meanwhile, Rocket Lab Corporation’s (NASDAQ:RKLB) core business has continued to perform well. The company reported first-quarter fiscal 2026 revenue of $200.3 million, above its own $185 million to $200 million guidance range and rising 63.4% from a year earlier. GAAP loss per share came in at $0.07, exceeding consensus estimates by $0.01. Even so, the investment story still depends on Neutron.
Hedge Funds Trim Their Rocket Lab Bets
Institutional ownership reflects a slightly cautious view. The number of hedge funds with positions in Rocket Lab dropped from 45 at the end of Q4 2025 to 43 by the end of the first quarter of 2026. Although the change was small, it indicates growing caution among institutional investors.
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