Space & Defense Stocks After the Bell: Rocket Lab Pops, Virgin Galactic Plunges, AeroVironment Misses as SpaceX IPO Buzz Builds (Dec. 9, 2025)

As Wall Street closed on Tuesday, December 9, 2025, space and defense stocks delivered a volatile mix of breakouts, bruising sell‑offs, and fresh catalysts that could shape the sector into 2026. Leveraged aerospace & defense ETF DFENfell about 1.7% on the day, underscoring choppy trading beneath the surface even as global defense spending and space ambitions continue to march higher. ^[1]

At the same time, investors digested big picture headlines: a nearly $1 trillion 2026 U.S. defense policy bill (NDAA)moving through Congress, new German megacontracts lifting European defense names, and a blockbuster SpaceX IPO plan for 2026 that could become the largest stock listing in history. ^[2]

Below is a full wrap of what moved space and defense stocks today after the bell, and what the latest forecasts and analyses are signaling for investors.

Sector Snapshot: Defense Stocks Trade on Policy, Not Just Prices

Even with individual names swinging hard, the broader defense complex stayed relatively contained:

The Direxion Daily Aerospace & Defense Bull 3X ETF (DFEN) closed around $60.50, down 1.7% after a strong multi‑week run. ^[3]
The SPDR S&P Aerospace & Defense ETF (XAR) was roughly flat to slightly higher, with closing levels edging above Monday’s close, suggesting only modest sector‑wide profit taking despite sharp single‑stock moves. ^[4]
In London, the FTSE 100 finished essentially unchanged, but defence stocks outperformed after a Bloomberg report that German lawmakers are set to approve roughly €52 billion in defense contracts next week. BAE Systems gained about 2.1%, while Rolls‑Royce added around 0.4%. ^[5]

In Washington, the 2026 National Defense Authorization Act (NDAA)—a nearly $1 trillion policy bill that sets Pentagon priorities—is heading for a House vote this week. The bill includes higher troop pay, support for Ukraine and the Baltics, funding for Taiwan and the Philippines, and expanded missile‑defense commitments in the Middle East. It’s being closely watched by primes such as Lockheed Martin (LMT) and RTX (RTX), which depend heavily on long‑cycle U.S. defense programs. ^[6]

For long‑term investors, today’s price action sits on top of this deep policy bedrock: as long as major powers continue to rearm and space becomes more contested, the demand backdrop for defense hardware, drones, and orbital infrastructure remains structurally strong—even if near‑term charts look noisy.

SpaceX: 2026 Mega‑IPO Sets the Valuation Ceiling

After the bell, one of the biggest talking points in space finance remained private, not public: SpaceX.

On December 5, Reuters reported that SpaceX has informed investors it plans an initial public offering in the second half of 2026, potentially listing the entire company, including Starlink. ^[7]
A follow‑up Bloomberg story today said SpaceX is “moving ahead” with plans for a 2026 IPO that would seek to raise well over $30 billion, targeting a valuation of about $1.5 trillion—a level that would eclipse even Saudi Aramco’s record $29 billion 2019 offering in terms of capital raised. ^[8]

That valuation effectively redraws the map for publicly traded space companies. Even though investors can’t buy SpaceX yet, the implied multiple on launch, satellite broadband, and space services helps frame what “premium” might mean for listed peers like Rocket Lab (RKLB), AST SpaceMobile (ASTS), and Virgin Galactic (SPCE).

Today’s trading in those names showed just how wide the gap is between aspiration and balance‑sheet reality.

Rocket Lab (RKLB): CSA Contract & Technical “Buy” Keep Momentum Going

Rocket Lab remained one of the brightest spots in listed space stocks.

Fresh funding from the Canadian Space Agency

On December 9, Rocket Lab announced it had been awarded nearly C$1 million in funding from the Canadian Space Agency (CSA) to develop a new medium‑class reaction wheel with a minimum angular momentum capacity of 25 Nms. The hardware is designed for 500–1,000 kg satellites and will be developed at the company’s Toronto facility, building on the heritage of reaction wheels already flown on over 300 satellites. ^[9]

The award is part of a broader C$14.2 million CSA initiative spanning 18 Canadian space firms, reinforcing Rocket Lab’s positioning not just as a launch provider but as a critical space‑systems supplier across multiple orbits. ^[10]

Stock reaction and volume

According to intraday and market‑data snapshots:

Rocket Lab shares traded around $53–54 in late regular trading today, up several percent versus Monday’s close near $51.56. ^[11]
Volume in recent sessions has repeatedly run above the 20‑day average, a sign of active institutional and retail participation as the stock rides a sharp two‑week rebound. ^[12]

Short‑term forecasts still flag high risk

Technical research from StockInvest upgraded RKLB from a “Sell” to a short‑term “Buy candidate” after a pivot‑bottom in late November, noting: ^[13]

The stock has risen in 7 of the last 10 sessions, up roughly 28% over two weeks.
Despite the rally, shares are still in a wider, falling trend, and their model projects a possible 10% pullback over the next three months, with a 90% probability band between approximately $34 and $58.

Meanwhile, a MarketBeat defense‑stock screener today highlighted Rocket Lab alongside Boeing, Spirit AeroSystems, GE Aerospace, RTX, Lockheed Martin, and Howmet as one of the most heavily traded defense names by dollar volume—a sign that the company is increasingly viewed as a core holding in the broader defense and space ecosystem, not just a speculative launcher. ^[14]

In short: fundamentals (contracts, backlog, and diversified space systems) and technicals (momentum and heavy trading) are finally pointing in the same direction, but the stock remains volatile and sensitive to broader risk‑on/risk‑off swings.

Virgin Galactic (SPCE): Debt Deal Triggers a Steep Sell‑Off

If Rocket Lab was the day’s space winner, Virgin Galactic was its cautionary tale.

Capital “realignment” and new 9.8% secured notes

Before the open, Virgin Galactic unveiled a complex capital realignment aimed at tackling its 2027 convertible debt: ^[15]

The company plans to repurchase and retire about $355 million of its 2.50% convertible senior notes due 2027via privately negotiated transactions.
To fund that, Virgin Galactic will sell roughly $46 million of common stock and pre‑funded warrants in a registered offering, and issue about $203 million in new 9.80% first‑lien notes due 2028, plus additional equity warrants, in a private placement.
Management expects the overall package to reduce total debt from $425 million to around $273 million, while pushing most remaining maturities out to late 2028—a timeline they argue better matches the ramp‑up of planned commercial “Spaceline” operations. ^[16]

On paper, that’s a balance‑sheet cleanup: less debt overall and more time to ramp revenue. In practice, the market focused on dilution, higher interest costs, and execution risk.

Shares tumble double digits

The reaction was swift:

Virgin Galactic stock closed around $3.81, down about 16% on the day, on volume nearly four times its average. ^[17]
In early after‑hours trading, SPCE ticked slightly higher to about $3.83, but that bounce barely dented the intraday damage. ^[18]
MarketWatch and other outlets noted that the debt‑restructuring news came on top of a share price that has already lost roughly a third of its value over the past year. ^[19]

Commentary from outlets like Benzinga framed the sell‑off as a collision between financial engineering and investor patience: the company has extended its runway but at the cost of more expensive secured debt and additional potential dilution just as it prepares for a long‑promised commercial launch ramp in 2026–2028. ^[20]

For now, the market is clearly in “show me” mode: until Virgin Galactic proves it can operate flights at scale and generate recurring cash flow, each new capital transaction risks becoming another pressure point for the stock.

AeroVironment (AVAV): Record Revenue, Net Loss, and a Sharp After‑Hours Drop

Drone and unmanned‑systems specialist AeroVironment delivered one of the most consequential defense earnings reports after the bell.

Fiscal Q2 2026: big top‑line, bottom‑line disappointment

In its fiscal 2026 second quarter release this evening, AeroVironment reported: ^[21]

Record revenue of $472.5 million, up about 151% year‑over‑year, driven largely by the acquisition of BlueHalo and strong demand for tactical missile systems and unmanned aircraft.
A GAAP net loss of $17.1 million (‑$0.34 per share), versus a profit of $7.5 million ($0.27 per share) a year ago.
The loss was significantly impacted by roughly $48 million in intangible amortization and other non‑cash acquisition‑related expenses.
A powerful book‑to‑bill ratio of 2.9 and bookings of about $1.4 billion, pushing backlog to new highs.
Updated full‑year guidance calling for revenue of about $1.95–$2.0 billion and EPS in the $3.40–$3.55 range.

In other words: operational demand is booming, but the accounting hit from acquisitions and integration is masking profitability in the near term.

Stock skids in extended trading & analyst reaction

The market focused on the earnings miss and the optics of a GAAP loss:

In extended trading, AVAV shares fell around 6% to roughly $281, according to Benzinga and Investing.com, as investors digested the gap between revenue growth and earnings. ^[22]
Ahead of the release, RBC Capital had already trimmed its price target from $440 to $400 while maintaining an Outperform rating—still implying around 40%+ upside from tonight’s post‑earnings levels. ^[23]
Other recent coverage has highlighted AeroVironment’s $874 million U.S. Army contract for drone systems and ongoing wins in loitering munitions and tactical UAS, reinforcing the view that the company sits squarely at the intersection of drone warfare and AI‑enabled targeting. ^[24]

Taken together, the Q2 print reinforces a familiar defense‑stock theme: backlogs and bookings are surging, but markets are increasingly discriminating on margin quality, cash conversion, and how much of the growth is fueled by pricey M&A.

Firefly, Specialty Names & M&A: The Wider Space & Defense Tape

Beyond the headline names, several smaller and adjacent players were in focus today:

Firefly Aerospace (FLY): Law firm Levi & Korsinsky announced the filing of a securities class‑action lawsuit on behalf of investors who bought shares in Firefly’s August 2025 IPO or in the market through late September. The complaint alleges the company overstated demand for its “Spacecraft Solutions” business and the commercial readiness of its Alpha rocket program. ^[25]
Senstar Technologies (SNT): The perimeter‑security specialist said it will acquire 3D LiDAR company Blickfeldin a deal worth €10.4 million plus up to €1 million in earn‑outs, highlighting the growing role of LiDAR and advanced sensing in both defense and critical infrastructure protection. ^[26]
AAR Corp (AIR): AAR announced a multi‑year extension of its exclusive global distribution agreement with Collins Aerospace for Goodrich de‑icing and specialty systems, reaffirming its role as a key aftermarket and logistics provider in the aerospace supply chain. ^[27]
Archer Aviation (ACHR): A Zacks note flagged Archer’s shares as having gained about 4.4% over the past three months, outpacing the broader aerospace‑defense industry, as investors continue to treat eVTOL and urban air mobility as a higher‑beta growth pocket within the defense complex. ^[28]

While these stories didn’t move sector ETFs on their own, they offer a snapshot of where capital and controversy are flowing: lawsuits in new‑issue space names, niche acquisitions in sensing and autonomy, and long‑term bets on next‑gen aircraft.

Analyst & Strategy Views: How the Street Sees Space & Defense Now

Today’s research and commentary layered several medium‑term themes on top of the day‑to‑day volatility:

Defense as “defensive,” but no longer cheap: MarketBeat’s defense‑stock roundup reminded investors why names like BA, RTX, LMT, GE Aerospace, and HWM continue to attract capital: government defense budgets tend to be more stable than consumer spending, supporting dividends and lower volatility—but actual returns still hinge on procurement cycles, political priorities, and execution on big programs. ^[29]
Europe’s valuation debate: Morningstar analysis published today pointed out that European aerospace & defense stocks have lagged high‑flying AI names in 2025, even as the region commits to higher long‑term defense outlays. The result: many European defense names now trade at more modest multiples despite still‑healthy order books. ^[30]
Technical vs fundamental in space: For Rocket Lab, purely technical models see a short‑term buying opportunity after a strong bounce, but also warn that the share price is still embedded in a longer‑term downtrend, implying elevated risk and potential drawdowns even if the space business continues to scale. ^[31]
Structural growth in the “orbital economy”: A World Economic Forum briefing today highlighted how developing economies are increasingly entering the space race, raising both opportunity and risk—from satellite‑internet expansion to growing concerns about orbital debris and space governance. ^[32]

The common thread: top‑line demand is not the problem. The key questions for investors are valuation, capital intensity, and who can convert geopolitical tailwinds into sustained, high‑margin cash flows.

What to Watch Next

Looking beyond today’s close, several catalysts could sway space & defense stocks into year‑end and 2026:

SpaceX’s next steps
- Any additional leaks, secondary share sales, or timetable updates around the 2026 SpaceX IPO will likely ripple across public space names, especially high‑growth launch and satellite players. ^[33]
Final passage of the 2026 NDAA
- Once the U.S. defense bill is finalized, investors will get more clarity on program‑level funding—from missiles and drones to space‑domain awareness and cyber—which could benefit specific contractors and integrators. ^[34]
German and European defense contracts
- Confirmation of the reported €52 billion German defense package and how those funds are allocated could further boost European primes such as BAE Systems and Rolls‑Royce and spill over into U.S. suppliers. ^[35]
Follow‑through in AVAV and SPCE
- For AeroVironment, the key question is whether investors refocus on backlog and growth once the earnings shock fades—or push the stock into a deeper reset. ^[36]
- For Virgin Galactic, traders will watch how the market digests the new 9.80% secured notes and equity issuance as details of future flight schedules emerge. ^[37]
Macro and rates
- With markets bracing for the Federal Reserve’s next move, any shift in the interest‑rate trajectory can alter the relative appeal of high‑growth space names versus cash‑rich defense primes and dividend‑paying ETFs. ^[38]

Bottom Line

Today’s after‑the‑bell tape in space and defense stocks underscored how binary the sector can look from the outside:

On one side are companies like Rocket Lab and AeroVironment, where contracts, backlogs, and technology roadmaps point to years of growth—even if GAAP earnings are bumpy.
On the other are stories like Virgin Galactic and Firefly, where ambitious visions collide with funding risk, legal scrutiny, and dilution, keeping volatility extremely high.

Add in a looming SpaceX mega‑IPO, a near‑$1 trillion U.S. defense bill, and Europe’s new wave of rearmament, and it’s clear the space & defense complex is entering a new phase in which policy, geopolitics, and capital markets are more tightly intertwined than ever.

As always, this article is for informational purposes only and is not investment advice. Space and defense stocks can be highly volatile. Before making any investment decisions, consider your risk tolerance, time horizon, and, ideally, speak with a qualified financial adviser.