Why Rocket Lab Stock Is Crashing Hard Today - 2025’s Biggest Space Sector Shock

Rocket Lab shares just entered freefall—and investors are scrambling for parachutes.

What's Driving the Nosedive?

The launch specialist got hammered by triple-threat headwinds: failed mission projections, supply chain bottlenecks biting harder than expected, and that classic Wall Street habit of overpromising while underdelivering. Numbers don't lie—even if earnings reports sometimes try to.

Space Isn't the Only Thing That's Volatile

Turns out, sending things to orbit is easier than maintaining shareholder confidence. While Rocket Lab focuses on cosmic ambitions, its stock performance is giving investors a black hole-level return. Another reminder that sometimes the only thing exploding in the space sector is the risk.

Rocket Lab stock has been on a ride this year

Rocket Lab has garnered a lot of attention from retail investors, helping drive shares more than 600% higher in the last year. That's because Rocket Lab is seen as a serious contender that could challenge Elon Musk's SpaceX for dominance in the space exploration market. A key element in its ability to do so is the successful development of Neutron, its heavy-lift rocket that can compete with SpaceX for major payloads.

The company announced yesterday that the Neutron launch pad was complete, helping to give investors confidence that the company is close to a successful launch.

RocketLab's valuation weighs on the stock

The company is now valued at nearly $22 billion, which is pretty hefty for a company with annual sales of about $500 million and operating in the red.

Image source: Getty Images.

The company does have momentum behind it and a substantial backlog, but it still lost almost $200 million in the last 12 months before taxes, interest, or depreciation are taken into account -- and considering it builds rockets, its depreciation costs are substantial. The company will continue to have to drive development and growth through expensive debt or stock dilution.

The opportunity is exciting, but for my taste, paying $22 billion for a company burning cash at this rate requires more faith than fundamentals. The opportunity is massive, but so is the risk of a hard landing.