Shares of aerospace and defense company Rocket Lab (NASDAQ:RKLB) fell 4.6% in the morning session after investment firm Craig-Hallum initiated coverage with a “Hold” rating.
The investment firm, Craig-Hallum, assigned the aerospace company a “Hold” rating and a $51 price target. While the firm acknowledged Rocket Lab’s growth potential, particularly with its upcoming Neutron rocket, it expressed concerns that the stock was “priced for perfection.” Analysts believed the ambitious timelines for the new rocket platform left little room for the delays or failures that are common in rocket development. The firm also highlighted competitive risks from established players like SpaceX. This cautious outlook from a newly covering analyst appeared to temper investor enthusiasm, as a “Hold” rating suggests an analyst believes the stock is fairly valued and does not recommend buying at current levels.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Rocket Lab? Access our full analysis report here, it’s free.
Rocket Lab’s shares are extremely volatile and have had 78 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 3.2% on the news that Cathie Wood’s ARK Invest disclosed the sale of a significant number of shares. The prominent investment management firm’s ARKX ETF sold 64,326 shares of the aerospace manufacturer, valued at over $3 million. This move by a high-profile investor appeared to prompt a wave of selling and profit-taking. The sale followed a period of massive gains for the stock, which had rallied significantly in the preceding weeks., Adding to the pressure, an analyst report published today described the stock as “overvalued” and “heavily technically overbought,” suggesting that a near-term drop was likely after its recent run-up. The news of a competing space company, Firefly Aerospace, filing for an initial public offering (IPO) also may have weighed on sentiment, as some investors might have sold shares to reallocate capital to the new market entrant.,.
Rocket Lab is up 79.7% since the beginning of the year, but at $44.85 per share, it is still trading 12.7% below its 52-week high of $51.39 from July 2025.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
