What Happened?
Shares of aerospace and defense company Rocket Lab (NASDAQ: RKLB) jumped 10.2% in the morning session after it announced a significant expansion of its U.S. semiconductor manufacturing operations, supported by a $23.9 million government award.
The company announced a major expansion of its U.S. operations to produce space-grade semiconductors and solar cells, backed by a $23.9 million award under the CHIPS and Science Act. This initiative is designed to strengthen the domestic supply chain for national security space programs and meet the growing demand for advanced components in satellite and defense technology.
Adding to the positive momentum, Rocket Lab also recently completed its 70th successful Electron mission. This operational milestone solidifies the Electron rocket's status as the world's most frequently launched small orbital rocket and underscores the company's consistent execution.
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What Is The Market Telling Us
Rocket Lab’s shares are extremely volatile and have had 74 moves greater than 5% over the last year. But moves this big are rare even for Rocket Lab and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 8.8% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure.
A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Rocket Lab is up 94.5% since the beginning of the year, and at $48.55 per share, it is trading close to its 52-week high of $51.39 from July 2025.
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