Market Conditions Spark Interest in Growth Stocks Like Tesla and Rocket Lab

Since the year began, market volatility has been prevalent. While some investors choose safer options, others are actively looking for growth stocks at lower prices. Investors with long-term perspectives have been particularly focused on finding opportunities in companies like Tesla (NASDAQ: TSLA) and Rocket Lab (NASDAQ: RKLB), both of which have seen stock price decreases of 15% and 7% over the past year.

Tesla: Opportunities Amidst Challenges

Lee Samaha (Tesla): After a 15% decline this year, Tesla has disappointed some investors with lower-than-expected sales. Concerns have risen regarding possible brand damage linked to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE).

The drop in Tesla’s stock price mirrors various negative news reports. However, the company faces several promising catalysts that may reshape investor outlooks:

• Musk has stepped back from his role at DOGE.
• Tesla has effectively transitioned Model Y production to the new Juniper model, which could boost deliveries of its top-selling vehicle.
• The company intends to launch lower-cost models this year and is working to decrease production costs.
• Plans are in place for mass production of the robotaxi concept car, Cybercab, by 2026.
• A robotaxi equipped with unsupervised autonomy is set to launch on a Model Y in Austin in June.

The robotaxi initiative could significantly influence investor expectations. Successful implementation may yield substantial long-term revenue growth, generated per mile driven by each robotaxi, whether it’s a Cybercab or a modified Tesla.

It’s important to note that Tesla has previously failed to meet ambitious targets, particularly regarding robotaxis and full-service driving. However, delays may have a silver lining. The success of other companies like Waymo has increased public acceptance of robotaxis, a sector Tesla plans to enter soon.

Rocket Lab: Aiming for Growth in the Space Sector

Scott Levine (Rocket Lab): Rocket Lab’s stock soared by 361% in 2024 but has since pulled back somewhat this year.

Since 2025 began, Rocket Lab Stock has underperformed, declining more than 6% while the S&P 500 (SNPINDEX: ^GSPC) gained 0.3% as of this writing. This creates a potential buying opportunity for growth investors interested in space technology.

The stock’s decline largely stems from investor concerns about the company’s ability to launch its Neutron rocket by 2025. These concerns were heightened by a critical report from Bleecker Street Research.

Despite this, Rocket Lab maintains confidence in its timeline and has reaffirmed expectations during its recent earnings presentation. Demand for the Neutron rocket remains strong, and the company anticipates bidding on U.S. Space Force contracts valued at $5.6 billion following its initial launches.

In Q1 2025, Rocket Lab saw year-over-year revenue growth of 32%, reaching $122.6 million. The company concluded the first quarter with a backlog of $1.067 billion, underscoring strong demand for its launch services.

Though Rocket Lab is currently unprofitable, its stock’s recent decline provides forward-looking investors the chance to acquire shares at a lower entry point compared to earlier this year.

Should Investors Consider Tesla and Rocket Lab Now?

Investing in innovative firms like Tesla and Rocket Lab carries inherent risks. These companies often face significant market fluctuations during downturns. Investors who can tolerate such volatility may find rewarding opportunities in the future.

Thus, those comfortable with risk might consider investing in Tesla and Rocket Lab stocks despite their recent downturns.

A Second Chance at Profitable Investments

Do you ever feel like you missed out on top-performing stocks? Presently, there are opportunities in the market worth noting.

• Nvidia: If you invested $1,000 at our recommendation in 2009, you’d now possess $351,127!
• Apple: A $1,000 investment from our 2008 suggestion would have grown to $40,106!
• Netflix: Investing $1,000 when we recommended it in 2004 would yield $642,582!

Currently, we’re recommending several promising companies. The market might not present another chance like this anytime soon.

See the list of recommended stocks »

Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.