RJ Hamster
When the Next Cycle Isn’t One Metal, Positioning Matters
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Additional Reading from MarketBeat.com
RKLB Pulls Back Sharply: Healthy Reset or Breakdown in the Story?
Submitted by Ryan Hasson. Publication Date: 2/10/2026.
Shares of Rocket Lab Corporation (NASDAQ: RKLB), one of the fastest-growing names in aerospace and defense, have come under pressure recently. The stock is down nearly 10% for the month and more than 20% from its record-setting highs reached in January. As of Monday’s close, shares were off almost 24% from their peak, technically placing the stock in bear market territory.
The pullback marks a clear shift in momentum after an exceptional run. It also raises an important question for long-term investors: has the growth story fundamentally changed, or is this simply a routine reset within a much larger uptrend?
What Triggered the Pullback?
The initial catalyst for the selloff came in January, when Rocket Lab disclosed that a Stage 1 tank ruptured during qualification testing at its Long Beach, California, facility.
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Key Points
- Rocket Lab has entered bear-market territory, driven by short-term uncertainty around Neutron testing and headlines about government funding.
- The broader uptrend remains intact, with shares holding above the 200-day moving average and showing signs of stabilization near the 50-day SMA.
- Wall Street remains bullish, with rising price targets and analysts viewing recent setbacks as routine development noise ahead of key catalysts.
While the headline spooked markets, Rocket Lab quickly noted that such outcomes are not uncommon during development testing. The company confirmed that there was no damage to surrounding facilities and that a replacement Stage 1 tank is already in production. Importantly, Neutron’s development program remains active.
Still, uncertainty about whether the incident could lead to another delay for Neutron’s maiden flight weighed on sentiment. Rocket Lab said it would assess the impact and provide an updated timeline during its fourth-quarter earnings call later this month, leaving investors without immediate clarity.
More recently, shares faced additional pressure after Congress declined funding for a planned 2031 Mars sample-return mission. That headline reignited concerns around long-term government funding visibility, adding to the negative news flow.
After a massive multi-year rally that saw RKLB surge more than 1,300% over the past three years, and with the stock trading at extremely overbought levels earlier this year, some degree of profit-taking was inevitable once sentiment shifted.
The Bigger Trend Remains Intact
Despite the recent volatility, Rocket Lab’s broader technical structure remains constructive. The stock has pulled back toward its rising 50-day simple moving average and, so far, appears to be finding support in the $70s. That price action suggests a potential higher low within its longer-term uptrend.
Crucially, shares remain well above the 200-day moving average, a key indicator that the primary trend is still intact. Even after the correction, Rocket Lab remains positive year-to-date, underscoring how strong the underlying move has been.
Other space-related stocks have also experienced similar pullbacks in recent weeks, pointing more toward sector-wide consolidation than company-specific deterioration. With investor enthusiasm around the space economy still elevated and speculation building about a potential SpaceX IPO later this year, interest in the sector remains strong.
From a technical standpoint, the picture would only materially weaken if RKLB fell below its 50-day moving average and drifted toward its 200-day moving average. For now, that scenario has not played out.
Wall Street Remains Supportive
Analyst sentiment has remained notably resilient throughout the pullback. Rocket Lab currently carries a consensus Moderate Buy rating, and price targets have continued to move higher. Three months ago, the consensus target sat near $57; as of early February, it had climbed to almost $73.
Several analysts characterized the Neutron testing issue as a routine part of launch vehicle development rather than a fundamental setback. Bank of America reiterated its Buy rating, while TD Cowen echoed confidence in Neutron’s long-term potential, emphasizing that no facility damage occurred and replacement hardware is already underway.
Looking ahead, Rocket Lab’s upcoming earnings report will be a key inflection point. Investors will be focused on updates to Neutron’s launch timeline, progress on vertical integration, margin trends, and the company’s growing backlog.
For now, the recent pullback appears less like the end of the story and more like a pause—one that, over the long term, risk-tolerant investors may view as an opportunity rather than a warning sign.
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We are not securities dealers or brokers, investment advisers or financial advisers, and you should not rely on the information herein as investment advice. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the profiled company’s SEC and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk.
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