This article first appeared on GuruFocus .
Rocket Lab ( NASDAQ:RKLB ) climbed after securing a major U.S. military contract, giving investors another reason to believe the space company's defense business is becoming a powerful long-term growth engine.
Shares of Rocket Lab gained about 3% on Thursday morning after the company was selected for a $397 million contract by the U.S. Space Force to support the Space-Based Airborne Moving Target Indicator (SB-AMTI) program. Under the agreement, Rocket Lab will develop a constellation of "Flatellites" and use its upcoming Neutron rocket for future missions.
The latest contract adds to Rocket Lab's growing list of government customers as the company continues expanding beyond small satellite launches into defense systems and spacecraft manufacturing.
Rocket Lab also completed its 92nd Electron mission, successfully placing the QPS-SAR-13 satellite into orbit for Japan's Institute for Q-shu Pioneers of Space. It marked the eighth successful mission Rocket Lab has completed for the customer, highlighting the company's growing base of repeat launch clients.
The combination of a new defense award and another successful launch helped lift investor sentiment, especially as governments around the world increase spending on national security and space-based capabilities.
