As of Friday morning before market open, for the most part stocks weren't having a bad week. As always there were exceptions, however, and one of the unfortunate outliers was software development solutions provider GitLab (NASDAQ: GTLB).

On the back of a quarterly earnings report that disappointed the market, plus subsequent analyst price target cuts and even a recommendation downgrade, the company's share price sagged. As of early Friday morning, the stock had declined by more than 10% week to date, according to data compiled by S&P Global Market Intelligence.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A forgettable first quarter?

This, despite the fact that GitLab actually posted healthy growth rates in its first quarter. Total revenue rose by almost 27% year over year to $214.5 million, while non-GAAP (adjusted) net income increased more than sixfold to $29.4 million. Both figures topped the average analyst estimates, although not spectacularly.

Image source: Getty Images.

Investors like to concentrate on their view of the road ahead, rather than the numbers behind, so it was GitLab's guidance that had a more profound effect on sentiment.

The company's outlook for its current (second) quarter is for $226 million to $227 million in revenue, filtering down into per-share earnings of $0.16 to $0.17. While the analyst earnings estimate falls within the company's range, that for revenue is just above management expectations.

Goldman gets more bearish

And what was discouraging to investors was also dismaying to quite a few analysts tracking GitLab. A clutch of them reduced their price targets on the stock with one -- white-shoe investment bank Goldman Sachs -- even pulling the lever on a recommendation downgrade. Goldman's Kash Rangan now feels the stock is only a neutral, down from his previous buy, at a price target of $50 per share.

I feel investors and pundits alike are overreacting to the quarterly results. While GitLab's revenue growth is declining, it's still turning in very profitable results and it operates a useful service. I think GitLab is therefore worth a look as something of a bargain play in its niche.

Should you invest $1,000 in GitLab right now?

Before you buy stock in GitLab, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GitLab wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GitLab and Goldman Sachs Group. The Motley Fool has a disclosure policy.

Software development facilitator GitLab (NASDAQ: GTLB) was facilitating some handsome returns for shareholders on Thursday, thanks in no small part to an optimistic new analyst note. In late-session trading the company's share price was up by almost 4%, and doing much better than the slumping S&P 500 index with its 0.2% decline.

Bullish pundit take reiterated

That note was published in anticipation of the release of GitLab's earnings for the fiscal first quarter of 2026, which is scheduled for next Tuesday, June 10. Its author, KeyBanc's Jason Celino, reiterated his overweight (buy, in other words) recommendation on the specialty tech stock, and his price target of $60 per share. That implies potential upside of nearly 22% on the stock's current level.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

According to reports, Celino believes GitLab could very well post a year-over-year revenue growth figure higher than the lofty 25.9% analyst consensus. In his view this will be driven by continued take-up of the company's Duo and Dedicated solutions, the former of which is powered by artificial intelligence (AI) functionalities.

That growth should have a positive knock-on effect with GitLab's full-year guidance; the analyst implied that the company's projections for the period will be raised. He did sound a note of caution about the spending of public-sector clients, given recent federal government budget-tightening efforts.

Rolling along

GitLab is indisputably a success story in the tech world, and has solid momentum behind it that looks set to continue. Those public sector clients are something of a worry; however, I feel the company is resilient enough to survive a notable downturn in the segment.

Should you invest $1,000 in GitLab right now?

Before you buy stock in GitLab, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GitLab wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GitLab. The Motley Fool has a disclosure policy.

Explore the exciting world of LandBridge Company (NYSE: LB) with our expert analysts in this Motley Fool Scoreboard episode. Check out the video below to gain valuable insights into market trends and potential investment opportunities!

*Stock prices used were the prices of April 2, 2025. The video was published on May 8, 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Should you invest $1,000 in LandBridge Llc right now?

Before you buy stock in LandBridge Llc, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LandBridge Llc wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $717,471!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Nicholas Sciple has no position in any of the stocks mentioned. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

April showers may have generally doused the spirits of investors, as the S&P 500 (SNPINDEX: ^GSPC)
nudged about 0.7% lower last month, but not all stocks suffered. Launch services provider Rocket Lab USA (NASDAQ: RKLB), for example, blasted 21.9% higher, according to data provided by S&P Global Market Intelligence.

Besides both the United States Department of Defense and the U.S. Air Force selecting Rocket Lab for participation in two noteworthy programs, the United Kingdom's Ministry of Defense awarded Rocket Lab a contract that motivated investors to bid Rocket Lab stock higher.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Catalysts fueling Rocket Lab stock's rise

Investors received a double dip of positive news in mid-April, when Rocket Lab announced that both the U.S. Air Force and the U.K. Ministry of Defense had selected the company as a contender for contracts in multibillion-dollar programs.

Rocket Lab may bid on contracts available through the U.S. Air Force's Enterprise-Wide Agile Acquisition Contract, a $46 billion program that has several goals, including the rapid development of innovative technologies. Similarly, through its Hypersonic Technologies & Capability Development Framework, the U.K. Ministry of Defense may award Rocket Lab contracts to develop hypersonic capabilities.

Of interest for both programs is Rocket Lab's Hypersonic Accelerator Suborbital Test Electron (HASTE) launch vehicle, a variation of the small orbital rocket Electron.

Addressing the HASTE vehicle, Rocket Lab's CEO Peter Beck said:

The ability to contribute toward the collective security of the United States and the United Kingdom across both of these important programs is a proud moment for the HASTE team, and a demonstration of Rocket Lab's commitment to lead from the front when it comes to innovative and unique solutions for hypersonic technology development.

Later in the month, investors learned that defense contractor Kratos had chosen Rocket Lab to provide its HASTE launch vehicle for a test flight in support of the Multi-Service Advanced Capability Hypersonic Test Bed (MACH-TB) 2.0 program, a five-year, $1.45 billion contract to develop hypersonic technologies.

Rocket Lab stock closed nearly 8% higher the day after the company reported the partnership with Kratos.

Is now the time to hitch a ride with Rocket Lab?

While the selections Rocket Lab received regarding its HASTE vehicle may not immediately translate to growth on its income statement, they certainly have the potential to do so in the future. The development of hypersonic capabilities is a top concern for governments looking to retain military advantages over adversaries.

Rocket Lab has distinguished itself as a leader in launch services, as its Electron rocket is the second-most frequently launched vehicle annually, and it'd be unsurprising if it further asserts its prowess as a leader in the hypersonic capabilities that the U.S. and U.K. governments are exploring in the aforementioned programs.

With shares of Rocket Lab down about 10% year to date as of this writing, growth investors looking for space stock exposure would be smart to take a closer look at Rocket Lab stock.

Should you invest $1,000 in Rocket Lab USA right now?

Before you buy stock in Rocket Lab USA, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rocket Lab USA wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

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

Shares of Rocket Lab (NASDAQ: RKLB) are trading higher this week. The company's stock had gained 17.3% as of 11:20 p.m. ET on Friday and was up as much as 21.4% earlier in the week. The rise comes as the S&P 500 and the Nasdaq Composite had one of the most volatile weeks in market history.

The launch service provider announced a new family of customizable satellite solar arrays at a major industry conference this week, boosting investor optimism.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A new product line is coming

Rocket Lab announced its new Standardized Array (STARRAY) product line at the 40th Space Symposium in Colorado Springs. The company described STARRAY as a family of customizable, next-generation solar arrays designed to meet the power needs of satellites of all types.

STARRAY solar arrays can be customized to fit each system, capable of providing a satellite with 100 watts of power to more than 2,000 watts. Brad Clevenger, vice president of space systems at Rocket Lab, spoke to the importance of this customization and emphasized Rocket Lab's efficiency, saying, "Our objective is to offer the industry mission-specific customization with short lead times and lower costs."

The STARRAY line is another step in Rocket Lab's push to diversify its product offerings beyond its core launch capabilities, which tend to be much more expensive and offer tighter margins.

Rocket Lab has won some key contracts

Rocket Lab was recently awarded a contract as part of the National Security Space Launch (NSSL) program, with a ceiling of $5.6 billion. This could prove to be a key development for Rocket Lab, positioning it as a potential leader in national security missions. Still, Rocket Lab has a long way to go. The NSSL contract is contingent on Rocket Lab building a larger launch system -- its current one, though highly successful, is too small to compete for contracts like those from the NSSL program.

The company is currently operating at a loss, though this isn't unusual for a company developing advanced technologies -- at least for a time. If it can successfully build the larger launch system, it can compete with the likes of SpaceX, winning contracts that would see its top line increase substantially and move closer to positive earnings.

The company plans to have a system capable of this by 2026, but these timelines are certainly never guaranteed. Given the uncertainty involved, Rocket Lab is for investors with a particularly high risk tolerance and a well diversified portfolio.

Should you invest $1,000 in Rocket Lab USA right now?

Before you buy stock in Rocket Lab USA, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rocket Lab USA wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.