Rocket Lab's Neutron Hiccup Sparked a Sell-Off—Overreaction or Omen?

Understand why Rocket Lab pulled back from January highs, what the Neutron testing incident means, and the key levels and catalysts investors are watching.

Published on Feb. 10, 2026

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Shares of Rocket Lab Corporation, one of the fastest-growing names in the aerospace and defense space, have come under pressure recently. The stock is down nearly 10% for the month and more than 20% from its record-setting highs reached in January. The initial catalyst for the sell-off came in January, when Rocket Lab disclosed that a Stage 1 tank ruptured during qualification testing at its Long Beach, California, facility.

Why it matters

While the headline spooked markets, Rocket Lab quickly noted that such outcomes are not uncommon during development testing. The company confirmed that there was no damage to surrounding facilities and that a replacement Stage 1 tank is already in production. Importantly, Neutron's development program remains active. Still, uncertainty around whether the incident could lead to another delay for Neutron's maiden flight weighed on sentiment.

The details

Rocket Lab stated that it would assess the impact and provide an updated timeline during its fourth-quarter earnings call later this month, leaving investors without immediate clarity. More recently, shares faced additional pressure after Congress declined funding for a planned 2031 Mars sample-return mission. That headline reignited concerns around long-term government funding visibility, adding to the negative news flow.

  • In January, Rocket Lab disclosed that a Stage 1 tank ruptured during qualification testing at its Long Beach, California, facility.
  • Rocket Lab stated that it would assess the impact and provide an updated timeline during its fourth-quarter earnings call later this month.

The players

Rocket Lab Corporation

An American aerospace manufacturing company and small satellite launch service provider.

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What’s next

Rocket Lab's upcoming earnings report will be a key inflection point. Investors will be focused on updates to Neutron's launch timeline, progress on vertical integration, margin trends, and the company's growing backlog.

The takeaway

Despite the recent volatility, Rocket Lab's broader technical structure remains constructive. The stock has pulled back toward its rising 50-day simple moving average and, so far, appears to be finding support in the low-to-mid $70s, suggesting a potential higher low within its longer-term uptrend.