Rocket Lab USA Inc. RKLB is experiencing impressive growth after receiving a significant grant. On Tuesday, the stock surged more than 8% following the announcement of a $23.9 million CHIPS Act grant, which aims to improve its semiconductor operations in New Mexico.

This funding not only enhances production capabilities but also strengthens Rocket Lab’s role in the expanding space economy.

The grant allows Rocket Lab to increase the manufacturing of advanced solar cells for satellites. Brad Clevenger, VP of Rocket Lab Space Systems, emphasized that this support enhances U.S. leadership in compound semiconductor manufacturing and positions Rocket Lab as a pivotal force in space-grade technology.

Rocket Lab’s Stock Takes Flight

Rocket Lab’s stock has become a favorite among investors, soaring 495% over the past year, 479% in six months, and 125% just in the last month.

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Positive market sentiment is reflected in the stock’s technical indicators, with its price well above the eight, 20, 50, and 200-day simple moving averages, indicating a strong upward trend. The moving average convergence/divergence (MACD) is at 3.65, further confirming this bullish trend.

However, the relative strength index (RSI) is at 87.60, which suggests that the stock may be overbought. Traders are left to wonder whether this upward surge can continue or if a correction is on the horizon.

Read Also: Rocket Lab CEO Touts SpaceX Rival Status, Trump Impact On Space As Stock Surges Almost 30%

Expanding Beyond Rocket Launches

While Rocket Lab is primarily known for its Electron rocket, which is currently the third most launched globally, the company is broadening its scope.

The focus on its space systems division is growing, having already supported over 1,100 satellites. High-profile initiatives, such as NASA’s Mars mission and a $515 million contract to create 18 spacecraft for the Space Development Agency, are propelling its reputation.

The upcoming Neutron rocket is designed to handle heavier payloads, aiming to capture valuable U.S. Space Force contracts.

Strategizing for the Space Economy

As the global space economy is expected to reach $1.8 trillion by 2035, Rocket Lab’s integrated strategy, which includes launches, spacecraft manufacturing, and components, distinguishes it in a competitive landscape.

Its technology plays a crucial role in significant missions like NASA’s Artemis program and the James Webb Telescope, paving the way for substantial growth.

Despite the stock’s remarkable ascent, one pivotal question remains: Can Rocket Lab sustain its growth amidst increasing competition and high valuations?

Investors are keenly observing the unfolding developments.

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