Rocket Lab USA, Inc. (RKLB): A Bull Case Theory

We came across a bullish thesis on Rocket Lab USA, Inc. (RKLB) on Lorenzo Bastianelli’s Substack. In this article, we will summarize the bulls’ thesis on RKLB. Rocket Lab USA, Inc. (RKLB)’s share was trading at $26.45 as of 5^th June.

Rocket Lab (RKLB) delivered a strong Q1 2025, generating $122.6 million in revenue—a 32.1% year-over-year increase—fuelled by five Electron launches and continued momentum in its Space Systems business. Though revenue dipped sequentially due to lower average selling prices (ASP) for launches and production timing, CFO Adam Spice expressed confidence in higher ASPs and gross margin expansion through 2025. Electron has firmly established dominance in the U.S. small launch market, accounting for 63 launches since 2015—more than triple all competitors combined.

The company’s HASTE program also gained traction, securing contracts under the $46 billion EWAAC initiative and seven Department of Defence MACH-TB missions. Central to Rocket Lab’s long-term vision is its vertically integrated approach, which strengthens resilience and positions it as an end-to-end space company.

This strategy is reflected in the development of its reusable medium-lift rocket, Neutron, which recently secured a pivotal role in the U.S. Space Force’s $5.6 billion NSSL Phase 3 program, making Rocket Lab the only publicly traded company ever onboarded. With the first Neutron launch targeted for late 2025, key milestones—such as stage qualification, assembly progress, and engine testing—are already in motion.

Financially, Rocket Lab is nearing free cash flow positivity, excluding Neutron costs, with Electron on track for 24 annual launches and 50% gross margins.

Backed by $517 million in liquidity and a robust mission backlog, Rocket Lab is also pursuing M&A to further strengthen its supply chain and capabilities, exemplified by the pending Mynaric acquisition. Even without Neutron, Electron and Space Systems alone could soon support profitability, limiting downside and amplifying upside potential.

Previously, we covered a bullish thesis on Rocket Lab (RKLB) by Steve Wagner, which aligns with Lorenzo Bastianelli’s. The stock has since seen an appreciation of approximately 28%. Wagner focuses on the expanding $1.07 billion backlog, Space Systems’ dominant 71% revenue contribution, and the upcoming Neutron rocket as a long-term growth driver. Taken together, the theses paint a picture of a maturing space infrastructure company, with Neutron providing upside optionality and Electron and Space Systems forming a strong, increasingly profitable base.

Rocket Lab USA, Inc. (RKLB) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held RKLB at the end of the first quarter which was 14 in the previous quarter. While we acknowledge the risk and potential of RKLB as an investment, 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 extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey