SKN | Morgan Stanley Reframes Rocket Lab as Space Infrastructure Play After Post-Rally Upgrade

Key Takeaways:

• Morgan Stanley upgraded Rocket Lab to Overweight and lifted its price target sharply, signaling a strategic re-rating rather than a momentum chase.
• The bank views Rocket Lab as transitioning from a launch-focused company into a scaled space infrastructure provider.
• Neutron’s anticipated debut in 2026 is seen as the critical catalyst that could unlock larger, recurring contracts.

Shares of Rocket Lab received a notable endorsement after Morgan Stanley upgraded the stock to Overweight and raised its price target to $105 from $67. While the new target implies a more modest upside from current levels, the significance of the move lies less in near-term price action and more in how the bank is reframing Rocket Lab’s long-term role within the global space economy.

With the stock trading near 52-week highs following a remarkable 291% gain in 2025, the upgrade reflects confidence that Rocket Lab has moved beyond speculative growth and into a more durable phase of execution.

From Speculation to Space Infrastructure

Space-related equities have regained attention in recent weeks, helped by renewed enthusiasm around satellite connectivity and defense-linked programs. While peers have seen sharp, short-term rallies, Rocket Lab is increasingly being treated as the sector’s bellwether rather than a fringe beneficiary.

Morgan Stanley’s note emphasizes a higher launch cadence, expanding product offerings, and a policy environment that increasingly favors established operators. This combination suggests a market that is maturing, where scale and reliability matter more than novelty.

The Space Economy’s Growth Narrative Gains Credibility

The broader backdrop is supportive. According to estimates frequently cited by policymakers and industry groups, the global space economy could approach $1.8 trillion by the mid-2030s. Growth is being driven by demand for broadband connectivity, Earth observation, navigation, and data-intensive workloads that increasingly intersect with AI.

Defense spending adds another layer of durability, as governments prioritize distributed satellite networks that are more resilient than traditional, centralized systems. This structural demand underpins Morgan Stanley’s more confident stance on Rocket Lab’s long-term earnings visibility.

An End-to-End Space Platform

A key reason for the upgrade is Rocket Lab’s evolution into a vertically integrated space company. Beyond launches, its space systems business designs and manufactures satellite platforms and components that have supported more than 1,700 missions to date. This diversification reduces reliance on any single revenue stream and enhances customer stickiness.

On the launch side, Electron remains a proven workhorse for small satellite deployments, while HASTE serves specialized suborbital and hypersonic missions. Together, these programs provide recurring activity while the company prepares for its next phase.

Why Neutron Matters for the 2026 Outlook

The centerpiece of Rocket Lab’s longer-term thesis is Neutron, its reusable medium-lift rocket. Morgan Stanley views Neutron as the gateway to a higher tier of contracts, including constellation deployment and cargo missions that are currently capacity-constrained across the industry.

If first launch targets around early 2026 are met, Rocket Lab would gain access to larger, repeatable demand pools and materially improve deployment economics. That transition underpins the bank’s view that Rocket Lab is entering a more durable growth cycle rather than peaking after a strong rally.

Forward-Looking Perspective

Morgan Stanley’s upgrade underscores a broader shift in how the market is valuing space companies. The emphasis is moving away from speculative timelines and toward execution, scale, and infrastructure relevance. Rocket Lab’s strong 2025 performance has earned it credibility, but the next phase hinges on delivery rather than promise.

As 2026 approaches, investor focus will increasingly center on Neutron’s progress, launch cadence consistency, and the expansion of space systems revenue. If those elements align, Rocket Lab’s recent re-rating may prove less about optimism and more about recognition.

For a confidential discussion on how space infrastructure and aerospace technology exposure can be assessed within a forward-looking growth allocation, contact our senior advisory team.

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