Rocket Lab’s shares have been on a wild ride. After surging nearly 196% over the past twelve months, the stock touched $151 in late May before shedding more than a third of that value. At Thursday’s close of $100.46, the equity is down 33.47% from its 52-week high and has dropped 12.41% over the past 30 days. The selloff isn’t a mystery: investors are recalibrating just how likely it is that the company’s next-generation Neutron rocket actually flies on schedule.
The original target for Neutron’s maiden voyage was 2025, but that window has already closed. Rocket Lab now eyes the fourth quarter of 2026, having filed with the FAA for launch authorization covering July 1 through December 31 of that year. A formal FAA filing is a milestone—but it’s not a guarantee. The real test will come on the ground, where a critical piece of hardware must hold together under pressure.
The January Crack That Echoed
The timeline took a major hit in January when a fuel tank on Neutron’s first stage ruptured during a hydrostatic pressure test. That single failure threw the program’s schedule into doubt. Rocket Lab is replacing the damaged unit with a tank built using automated fiber placement, a process the company believes is more robust. CEO Peter Beck has urged shareholders to focus on hardware milestones rather than calendar dates. “I’m suspicious when everything goes smoothly,” he said, warning that test campaigns rarely produce clean results.
The tank problem remains the single most important variable. A successful qualification test of the redesigned first-stage tank—without structural breaks—is a prerequisite for any launch attempt in the fourth quarter of 2026. Every other development, from the growing backlog to the Electron launch cadence and even the planned Iridium acquisition, takes a back seat until that tank proves itself.
Demand Before a Single Flight
Despite the technical uncertainty, commercial interest in Neutron is building faster than the rocket itself. Rocket Lab came into 2026 with a record quarter: more launch contracts signed in the first three months than the number of missions it flew in all of 2025. Revenue topped $200 million for the first time, hitting $200.3 million, a 63.5% year-over-year jump. The total backlog swelled to $2.2 billion.
Should investors sell immediately? Or is it worth buying Rocket Lab USA?
The five Neutron missions booked during the first quarter are the first publicly confirmed commercial orders for a rocket that has yet to leave the ground. A separate multi-launch agreement adds five dedicated Neutron flights and three Electron missions, scheduled between 2026 and 2029. Kicking off that cadence with a clean debut in the fourth quarter could quickly convert pre-sold capacity into revenue and send the stock charging back toward its 52-week high.
The Cost of Waiting
Execution risk, however, is not theoretical. The development bill for Neutron has crept upward from an initial $250 million estimate to $300 million, and Rocket Lab now expects to have spent roughly $360 million on the program by the end of 2025. That includes about $15 million per quarter in personnel costs alone. If the first-stage tank fails again, or any other subsystem crack appears during the ongoing test campaign, the FAA window could slip—and costs would keep piling up without offsetting revenue.
The market is already pricing in that uncertainty. The 14-day relative strength index sits at 47.8, a neutral reading, while annualized 30-day volatility has surged to 107.41%, reflecting deep investor skittishness. At its current valuation of $56.7 billion, Rocket Lab trades at roughly 62 times expected annual sales—a multiple that leaves little room for schedule slips.
A Binary Bet on a Tank
The next concrete signal will come when Neutron hardware reaches the test stands at Wallops Island, Virginia. Static-fire tests and full dress rehearsals at Launch Complex 3, if completed without incident, would ease timeline pressure and could reignite bullish momentum. Beck has cautioned against over-optimism: “It really depends on what you find when you test.” But if the tank holds and the fourth-quarter 2026 target sticks, the stock has room to run toward its previous highs.
Should the tank rupture again, or any new hardware fault emerge, the launch window would likely re-open—and the stock’s recent consolidation, which has already brought it within striking distance of its 100-day moving average at $88.83, could stretch into a deeper correction. For now, the entire Rocket Lab investment thesis comes down to one piece of carbon composite hardware and whether it can survive the pressure.
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