Key Points
The Neutron rocket can boost revenue and margins once it is commercialized later this year.
Rocket Lab's backlog growth continues to surge as public and private sector customers secure orders in advance.
The prospect of orbital AI data centers can accelerate Rocket Lab's long-term revenue growth.
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Rocket Lab (NASDAQ: RKLB) has been one of the best growth stocks to own over the past three years. It's up by more than 1,500% during that time, and that includes almost tripling in value over the past year.
Some investors believe Rocket Lab is just getting started and can be a millionaire maker for people who get in at current levels. These are three reasons investors are bullish about the stock.
The Neutron rocket should boost revenue
Image source: Getty Images
Rocket Lab specializes in reusable rockets for small-launch services. The company has delivered more than 200 satellites to orbit, working with private and public sector customers.
While it's small-lift services have been successful, there's one catch. Small-lift rockets can't carry as much weight as medium-lift rockets. That's why Neutron, the company's medium-lift reusable rocket, is a game changer for the space stock. This rocket can hold more weight, which enables higher revenue per launch and lets Rocket Lab work with more companies. The rocket is projected to arrive at the Rocket Lab Launch Complex 3 in Q1 2026 and should be commercialized by the end of 2026 if its test flight goes well.
Meanwhile, Rocket Lab's revenue continues to grow. Q3 2025 sales came to $155 million, representing a 48% year-over-year increase.
Backlog growth offers long-term visibility
Rocket Lab's revenue growth also comes as its backlog surges. The company wrapped up Q3 2025 with a $509.7 million launch backlog, marking a 56% year-over-year improvement. It's also up by almost 25% sequentially.
Rocket Lab has 49 launches in contract, and that includes 17 contracts signed in Q3. It conducted 21 launches in 2025, which was an annual record. That's more than a 25% year-over-year jump from its 16 launches in 2024.
The company told investors that it expects to recognize approximately 57% of its Q3 backlog within the next 12 months. That quick timeframe will free up resources for multi-launch deals and large satellite manufacturing contracts in the future.
Rocket Lab also has strong momentum going into the new year. Rocket Lab told investors in January that it had launched two rockets in eight days. That makes 81 successful Electron rocket launches in the company's history. Rocket Lab had a 100% success rate in 2025, which will give potential customers confidence.
M&A and a strong cash war chest set up market share gains
Rocket Lab isn't just relying on its own resources to become a leader in the space industry. It has also made multiple acquisitions that have enhanced its product quality and made it more attractive to potential customers.
The company completed the Geost acquisition in August and is approaching the completion of the Mynaric acquisition. Geost provides in-house advanced electro-optical and infrared sensor payloads, while Mynaric will provide optical systems.
Both of these acquisitions turn Rocket Lab into an end-to-end space company that can handle all components of rocket design, manufacturing, and launch without relying on vendors. This business model reduces Rocket Lab's costs in the long run and makes it a more desirable one-stop shop for potential customers.
Rocket Lab still has more than $1 billion in liquidity following these acquisitions, which can fuel additional acquisitions.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
