Rocket Lab Shares Slump Toward Key Moving Average Despite Neutron Engine Milestone and Expanding Launch Contract Backlog

Rocket Lab is delivering technical progress on its next-generation rocket, but the stock market remains unimpressed. The space company completed a full vacuum test of its Archimedes engine on July 14 — a critical step for the Neutron program — yet the share price continues to slide, testing a historically important support level.

Archimedes, which will power Neutron’s second stage, performed well in the vacuum test. Its vacuum variant, designated AVac, produces roughly 1.2 times the thrust of the sea-level version, thanks to a nozzle extension that adds about 2.5 meters to the engine’s height. Engineers used a “stub skirt” on the nozzle during the ground test to prevent flow separation that can occur when vacuum-optimized nozzles operate in normal atmospheric pressure. CEO Peter Beck called the test a decisive milestone for the Neutron program, which aims to deliver a reusable medium-lift vehicle by late 2026.

That first flight remains on track for the fourth quarter of 2026. But for a company whose valuation hinges largely on Neutron’s success, the gap between today’s milestones and that launch date leaves plenty of room for investor anxiety.

A Tale of Two Narratives

While the engineering team celebrates engine progress, the finance side faces a different reality. Rocket Lab’s stock closed at €66.50 on Wednesday, down 7.89% over the past seven days and 26.27% over the past month. That puts the shares roughly 50% below the 52-week high of €133.80 reached in late May. The 200-day moving average, currently at €67.30, is being tested — a level that has historically acted as a pivot point for the stock.

The 14-day relative strength index has dropped to 34.3, approaching oversold territory that tends to attract contrarian buyers. Yet the annualized 30-day volatility of 94.13% underscores how nervous trading has become.

The 12-month view offers some perspective: the stock remains 62.20% higher than a year ago, and it has gained 2.31% since the start of 2026. But for investors who bought near the highs, the pain is acute.

Should investors sell immediately? Or is it worth buying Rocket Lab?

Business Momentum on the Launch Pad

The market’s selloff stands in contrast to the company’s operational progress. Beyond the Neutron test, Rocket Lab is steadily expanding its core business. NASA, under its VADR contract, has committed to three more Electron launches from Launch Complex 1 in New Zealand, including the PolSIR and TSIS-2 satellite missions targeted for 2027. These add to the previously announced Aspera mission. The company did not disclose financial terms, but the backlog grew noticeably in the first half of 2026.

The flight schedule for July remains packed. On July 17, the LOXSAT 1 mission is set to launch for Eta Space and NASA under the Tipping Point program, testing a cryogenic oxygen management system in orbit using Rocket Lab’s Photon satellite bus. Two further Electron launches are expected later in the month: StriX Launch 11 for Synspective and “The Grain Goddess Provides” for iQPS. That last mission was briefly delayed, adding a short-term headwind for the stock, but such operational shifts rarely alter the long-term trajectory.

A Two-Horse Race with SpaceX

CEO Peter Beck recently offered a stark assessment of the commercial launch market. Of the more than 100 startups that raised billions in venture capital over the past decade, he argues only two remain viable: Rocket Lab and SpaceX. He described SpaceX as a “friendly rival” — the two companies compete for launch contracts but also collaborate, with Rocket Lab supplying reaction wheels and other components to industry giants. That “full stack” strategy, encompassing satellites and services beyond pure launches, is a key differentiator.

Valuation Debate Persists

Institutional sentiment remains largely positive. Morgan Stanley recently reaffirmed an optimistic price target of $293, well above current levels. But some market observers, including analysts at TipRanks, argue that even after the near-50% pullback from the high, the valuation relative to revenue remains ambitious. Rocket Lab’s market capitalization stands at roughly €44 billion.

For many investors, the stock’s fate hangs on a single event: a successful maiden flight of the Neutron rocket, now two years away. Until then, the shares are likely to oscillate between operational progress and valuation concerns, as the technical picture around the 200-day moving average becomes the next battleground.