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Rocket Lab Gets a Big Upgrade: Will Upside Follow?
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Rocket Lab Gets a Big Upgrade: Will Upside Follow?
Written by Ryan Hasson on January 20, 2026
At a Glance
- Morgan Stanley just turned bullish on Rocket Lab, upgrading the stock to Overweight from Equalweight and raising its price target to a Street-high $105.
- Neutron and Electron remain key catalysts, with a potential Neutron debut in early 2026 and rising launch cadence supporting the long-term growth narrative amid strong space and defense tailwinds.
- Short-term risk is elevated, as RKLB is overbought after a parabolic run, making pullbacks and consolidation more attractive entry points than chasing strength.
Shares of Rocket Lab (NASDAQ: RKLB)received another major vote of confidence this month after financial heavyweight Morgan Stanley significantly upgraded both its rating and price target on the stock. On Jan. 16, 2026, the firm raised its rating from Equal Weight to Overweight and lifted its price target from $67 to a Street-high $105.
The timing of the upgrade is notable. Rocket Lab is already trading at all-time highs, closing the Jan. 16 session at $96.30. That move pushed the stock’s year-to-date gain to 38%, while its one-year performance now stands at an eye-catching 287%. With shares already deep into a parabolic run, Morgan Stanley’s bullish call naturally raises an important question for investors: Is there still upside left in the short-term, or has the market already priced it in?
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Morgan Stanley Turns Bullish on Space and Rocket Lab
Morgan Stanley analyst Kristine Liwag framed the upgrade within a broader, optimistic outlook for the space technology sector in 2026. The firm has adopted what it calls an “Attractive” view on space tech, arguing that many of the drivers behind last year’s outperformance remain firmly in place.
It’s a similar view to what MarketBeat had previously noted for Rocket Lab and the overall sector.
“2025 was a banner year for the space industry on several fronts,” Liwag wrote, adding that higher launch cadences, new product introductions, and policy support should fuel 2026.
For Rocket Lab specifically, Morgan Stanley highlighted two key catalysts: expectations for the company’s first Neutron rocket launch in early 2026, and continued increases in launch cadence for its Electron rocket.
Neutron, in particular, represents a step-change opportunity for Rocket Lab, opening the door to larger payloads, higher-margin missions, and deeper exposure to defense and national security contracts.
Why the Bull Case Still Has Legs
Despite the stock’s sharp run, Rocket Lab continues to benefit from multiple structural tailwinds. The company recently secured an $816 million multi-year contract, reinforcing its growing role in government and defense-related space infrastructure. At the same time, global investment in space and defense capabilities remains elevated, driven by geopolitical tensions and national security priorities that are pushing governments to accelerate spending.
There’s also a broader sentiment tailwind at work. Speculation around a potential SpaceX IPO has helped shine a spotlight on the broader space ecosystem, often lifting publicly traded peers like Rocket Lab along with it
That said, Wall Street remains divided. RKLB currently has a Moderate Buy consensus rating based on 16 analyst opinions, with an average price target near $64. That’s well below current levels. A successful Neutron debut, however, could force analysts to materially reassess both revenue potential and valuation, potentially triggering a broader re-rating.
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Is RKLB a Buy at These Levels?
While the long-term story remains compelling, the near-term technical picture suggests caution. Rocket Lab is firmly in overbought territory, with momentum indicators such as RSI stretched following the stock’s rapid ascent.
For investors who bought shares at lower levels, the trends look favorable for continuing to hold the stock. But for new investors, patience may be warranted. A pullback into key short- and mid-term moving averages, followed by consolidation and base-building, would offer a more attractive risk-reward setup.
In short, Morgan Stanley’s upgrade reinforces Rocket Lab’s long-term potential, but after a near-vertical rally, the next high-probability entry may come on a pause, not a chase.
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