What Happened?
Shares of aerospace and defense company Rocket Lab (NASDAQ:RKLB) fell 8% in the afternoon session as markets tumbled after holding steady the previous day, while concerns over the ongoing trade war continued to spread.
Investors briefly felt some optimism after the Trump administration said it would hold off on tariffs for automakers that met USMCA (United States-Mexico-Canada Agreement) rules. That helped the auto sector in particular, and there was perhaps some hope that the door was open to more broadly delaying tariffs. The sentiment seemed to be shifting in the other direction today, and the market is in 'risk-off' mode, with sectors such as tech seeing outsized declines. As of this writing, the S&P 500 had fallen 7% from where it closed on February 19th and the Nasdaq Composite dropped 10% over the same period.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Rocket Lab? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Rocket Lab’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 53.4% on the news that the company reported impressive third-quarter results and provided an optimistic EBITDA forecast for the next quarter, which blew past analysts' expectations. Its revenue and EBITDA both outperformed Wall Street's estimates in the quarter. The performance was largely driven by strong demand in its space systems segment. Zooming out, we think this was a very good quarter.
Rocket Lab is down 25.5% since the beginning of the year, and at $18.59 per share, it is trading 41.1% below its 52-week high of $31.57 from January 2025.
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