Rocket Lab Stock (+6.1%): Morgan Stanley Upgrade Ignites Rally

Rocket Lab (RKLB), a prominent aerospace company, saw its stock surge by +6.1% on January 16, 2026. The move was catalyzed by a significant analyst upgrade from Morgan Stanley, which triggered a high-volume trading session. But with the stock now near its 52-week high, is this rally fundamentally justified or just a momentum chase?

The primary driver behind the stock’s sharp move was an upgrade from Morgan Stanley, which shifted its rating on RKLB from ‘Equal-Weight’ to ‘Overweight’ and substantially raised its price target to $105 from $67. This institutional endorsement, combined with a major U.S. Space Force contract, has bolstered the fundamental outlook for the company.

• Morgan Stanley cited strong industry tailwinds expected in 2026 for the space technology sector.
• RKLB recently secured its largest-ever contract with the U.S. Space Force to build 18 satellites, signaling growing defense sector reliance.
• The company’s revenue grew by 48.0% year-over-year in the latest reported quarter, demonstrating strong top-line growth.

Trade Mechanics & Money Flow

Trade Mechanics: What Happened?

The stock’s rally was technically significant, breaking through previous resistance levels on high volume. The closing price of $96.30 marked an all-time high for RKLB, positioning it just 3.4% below its 52-week high of $99.58.

• Trading volume surged to approximately 35.75 million shares, a 22% increase from the average daily volume of 29.43 million shares.
• Options market activity showed a strong bullish bias, with call options accounting for 72.33% of the total 338,660 contracts traded on the day.
• Short interest stood at a relatively low 8.39% of the public float as of the end of December 2025, suggesting the move was not a short squeeze.

How Is The Money Flowing?

The surge in trading volume and the nature of the analyst-driven catalyst suggest that institutional investors, or “Smart Money,” were the primary drivers of this move. The significant increase in institutional ownership in the preceding quarter further supports this view.

• Institutional ownership has seen a notable increase, with 999 funds reporting positions, an increase of 17.25% in the last quarter.
• Major players like Baillie Gifford and Capital World Investors have significantly increased their positions in RKLB.
• The stock was a top trending ticker on retail-focused platforms like Stocktwits, indicating heightened interest from individual investors.

Understanding trade mechanics, money flow, and price behavior can give you and edge. See more.

What Next?

FOLLOW. The move is underpinned by a significant institutional endorsement and a landmark contract win, suggesting a fundamental re-rating is underway. Watch for a consolidation above the $90.00 level. This price point represents a key psychological support level and a prior resistance that should now act as a floor if the upward trend is to be sustained. A successful hold above this level would signal a strong likelihood of a continued move towards the $105 price target set by Morgan Stanley.

That’s it for now, but so much more goes into evaluating a stock from long-term investment perspective. We make it easy with our Investment Highlights

Not comfortable with RKLB stock? Consider PORTFOLIOS instead.

Why Stock Pickers Win More With Multi Asset Portfolios

Individual stocks can soar or tank but multi asset exposure steadies the ride. A spread out portfolio captures upside while limiting the damage from any one market.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices