Rocket Lab Soars 7.9% on Morgan Stanley Upgrade and $816M Contract—Is This the Start of a New Bull Run?

Summary
• Rocket Lab (RKLB) surges 7.9% intraday, hitting a 52-week high of $99.58
• Morgan Stanley upgrades RKLB to Overweight with a $105 price target, citing strategic growth in space tech
• $816M SDA Tranche 3 contract positions Rocket Lab as a prime contractor for future defense projects
• Options activity intensifies, with call options like RKLB20260123C90 seeing 93.88% price change ratio
Rocket Lab’s stock is in a tailwind-driven frenzy, fueled by a historic defense contract and a bullish institutional upgrade. The stock’s 7.9% intraday surge reflects a confluence of sector optimism and company-specific catalysts, with technical indicators and options flow amplifying the momentum. As the space tech sector braces for 2026’s launch cadence and policy tailwinds, RKLB’s trajectory could redefine its role in the industry.

Morgan Stanley's Strategic Upgrade Ignites Rocket Lab's Surge
Rocket Lab’s 7.9% intraday rally is directly tied to Morgan Stanley’s upgrade to Overweight and a $105 price target, a 13% upside from its previous close. The firm highlighted the company’s $816M SDA Tranche 3 contract as a pivotal win, positioning Rocket Lab as a key player in the U.S. defense strategy. Analysts emphasized the firm’s 52% revenue growth over the past year and its role in the Golden Dome program, which could unlock long-term revenue streams. The upgrade aligns with broader sector optimism, as Morgan Stanley forecasts higher launch cadences and policy support through 2026. Institutional buying, including a 37.7% increase in Capital World Investors’ holdings, further underscores confidence in Rocket Lab’s strategic positioning.

Aerospace & Defense Sector Gains Momentum as Rocket Lab Outpaces Peers
The Aerospace & Defense sector, led by Lockheed Martin (LMT) with a 0.65% intraday gain, is seeing renewed interest amid defense budget expansions and geopolitical tensions. Rocket Lab’s 7.9% surge far outpaces the sector’s modest move, reflecting its unique exposure to space tech and defense innovation. While LMT’s growth is tied to traditional defense contracts, Rocket Lab’s focus on satellite tracking and missile warning systems aligns with emerging priorities like the Golden Dome strategy. The sector’s broader tailwinds, including Trump-era defense spending and NATO rearmament, create a favorable backdrop for Rocket Lab’s specialized offerings.

Options and ETFs Highlight Rocket Lab's Volatility—Strategies for Bulls and Cautious Traders
• MACD: 8.55 (above signal line 7.68), Histogram: 0.86 (bullish divergence)
• RSI: 67.10 (neutral to overbought)
• Bollinger Bands: Price at 97.97 (near upper band 97.31), middle band 77.33
• 200-day MA: 44.69 (far below current price)
Rocket Lab’s technicals suggest a short-term bullish trend, with the 52-week high at 99.58 acting as a critical resistance. The RSI near overbought territory and MACD divergence hint at potential consolidation, but the stock’s momentum remains intact. For traders, the key levels to watch are 97.31 (Bollinger upper band) and 77.33 (middle band).

Top Options Picks:
• RKLB20260123C90 (Call):
- Strike: $90, Expiry: 2026-01-23
- IV: 84.74% (high volatility), Delta: 0.7689 (strong directional bias), Theta: -0.5752 (rapid time decay), Gamma: 0.0248 (high sensitivity)
- Turnover: 2.01M (high liquidity)
- Payoff at 5% upside (97.97 → 102.87): $2.87/share
- This call offers aggressive leverage for a continued rally, with high gamma ensuring rapid premium gains if the stock breaks above 90.

• RKLB20260123P85 (Put):
- Strike: $85, Expiry: 2026-01-23
- IV: 73.02% (moderate volatility), Delta: -0.0864 (limited downside bias), Theta: -0.0578 (slow decay), Gamma: 0.0149 (moderate sensitivity)
- Turnover: 127K (reasonable liquidity)
- Payoff at 5% upside: $7.87/share
- This put provides a hedge against a pullback, with a low delta ensuring minimal premium erosion if the stock consolidates.

Action Insight: Aggressive bulls should target RKLB20260123C90 for a breakout above $90, while cautious traders may use RKLB20260123P85 to protect against a retracement. The 52-week high at $99.58 is a critical threshold—break above it, and the $105 price target becomes a realistic target.

Backtest Rocket Lab Stock Performance
Rocket Lab (RKLB) has experienced significant growth from 2022 to the present, with an 8% intraday surge on November 10, 2025, being a notable event. Here's a backtest of RKLB's performance following this surge:1. Continuation of Upward Trend: RKLB's stock continued to rise after the 8% surge, reaching $55.95 in after-hours trading on November 10, 2025. This momentum carried over to the following days, with the stock trading as high as $61.96 by December 11, 2025.2. Increased Volatility: The stock's volatility increased following the surge, with a high intraday range of $56.86 to $62.13 on December 11, 2025. This volatility reflects the market's reaction to RKLB's operational wins and sector synergy, which amplified the stock's momentum.3. Sector Synergy and Analyst Upgrades: The aerospace renaissance and speculation around space commercialization contributed to RKLB's rally. Analyst upgrades and sector tailwinds further boosted investor confidence, positioning RKLB as a focal point in the aerospace industry.4. Challenges and Risks: Despite the positive momentum, RKLB faces challenges such as negative profitability margins and insider selling activity. The company's financial health is also subject to sector-specific risks in the Aerospace & Defense industry.5. Long-Term Outlook: Looking ahead, RKLB's future performance will depend on its ability to sustain operational progress and manage financial risks. The company's roadmap, including the Neutron rocket program and R&D funding, suggests a positive outlook for the long term.In conclusion, RKLB's performance after the 8% intraday surge on November 10, 2025, has been positive, with the stock continuing to rise and experiencing increased volatility. However, investors should remain cautious of the company's challenges and risks, while monitoring its operational progress and financial health.

Rocket Lab's Bull Run Gathers Steam—Act Now on Key Levels and Options
Rocket Lab’s 7.9% surge is a testament to its strategic positioning in the space tech and defense sectors. With Morgan Stanley’s upgrade and the $816M SDA contract, the stock is primed for further gains, but traders must monitor the 52-week high at $99.58 and the 200-day MA at $44.69 for trend confirmation. The sector leader, Lockheed Martin (LMT), is up 0.65%, signaling broader industry strength. For investors, the key takeaway is to act decisively on the RKLB20260123C90 call if the stock breaks above $90, while hedging with the RKLB20260123P85 put. The next 72 hours will test Rocket Lab’s momentum—watch for a breakout above $99.58 or a pullback to $77.33 to determine the next phase of this trade.