Space-related equities moved sharply higher on Wednesday as Rocket Lab and SpaceX each attracted analyst attention following company-specific updates.
Rocket Lab shares climbed to the important $80 resistance level after the company reported strong second-quarter financial results. Revenue rose 62% year over year to $234 million, while backlog surged 137% to $2.36 billion. The company also received an additional $800 million in contracts after the quarter ended, including a Neutron deal with Kepler Communications, a $397 million contract with the US Space Force for flatellites, and a $266 million order for suborbital launches.
Net loss narrowed to $49 million from $66 million a year earlier. Management guided third-quarter revenue to $250 million to $265 million, with the upper end above the $253 million consensus. Gross margin is expected to improve to between 29% and 31%.
Analysts raised price targets following the report. Cantor Fitzgerald lifted its target from $96 to $122, Citizens Bank maintained a $130 outperform target, and Needham and KeyCorp reiterated buy or overweight ratings. The consensus target is now $110, roughly 40% above current levels. Rocket Lab also highlighted recent acquisitions, including the $8 billion Iridium deal and purchases of Mynaric and Motiv.
On the technical side, RKLB retreated from a year-to-date high of $151.04 in May to a low of $58.58 earlier this month, then bounced to $86 before pulling back to about $77. The stock is near its 200-day EMA and has formed a shooting star candle, which could signal a move toward $50 unless price breaks above $87.
SpaceX shares rose about 7% to $142.62, back above the $135 IPO price, after CEO Elon Musk discussed artificial intelligence plans during an all-hands meeting. Musk said AI revenue will likely exceed all other SpaceX revenue in September and significantly exceed it in the fourth quarter. He also outlined plans to train the Grok large language model on internal SpaceX information and said AI-based internet traffic could be 1,000 times human traffic within five years.
Starlink now has 22 million mobile subscribers. SpaceX shares have recovered after falling more than 30% from a June high of $201.80 ahead of the first lockup expiration. The next lockup period ends on August 20. Morgan Stanley maintained an Overweight rating and $300 price target, citing potential upside from the company's AI business.
