Rocket Lab stock is near all-time highs, so why is Cathie Wood selling?

Rocket Lab stock NASDAQ:RKLB has become one of the market’s loudest momentum stories, and Cathie Wood has been trimming into the strength.

On May 11, RKLB touched the all-time high of $123.94, up 15% on the day and marking the stock’s best session ever.

Yet ARK Invest had already been reducing its position in the days before that move, selling 113,402 shares on the prior Friday and another 50,312 shares on April 27 through ARKQ.

At those sale prices, the two trades totaled about $13.6 million (approx. Rs 3.8 billion) and involved roughly 163,700 shares.

ARK then turned around and added to Intellia Therapeutics, a move that fits its long-running habit of rotating from crowded winners into earlier-stage disruptors.

ARK’s playbook: Trim winners, chase next disruptor

Wood’s sale does not necessarily signal a bearish call on Rocket Lab.

ARKQ is an actively managed fund built around disruptive innovation, and its mandate explicitly includes autonomous technology, robotics and reusable rockets.

In practice, that means ARK often lets a position run, then pares it back when it becomes too large or too extended relative to the rest of the portfolio.

The Intellia purchase underscores that pattern: while ARK sold Rocket Lab, it bought 263,848 NTLA shares across ARKK and ARKG, worth about $3.6 million (approx. Rs 1 billion).

That is classic ARK behavior as they take gains in a name that has worked, then recycle the capital into a beaten-down theme with more perceived upside.

There is also precedent, as in November 2024, ARK sold nearly $9 million (approx. Rs 2.5 billion) of Rocket Lab shares during a 28% surge.

The move looked painfully early in hindsight because the stock kept climbing afterward.

Also read: Is it too late to buy Rocket Lab stock as it soars on Q1 earnings?

The bull case ARK may be walking away

The case for Rocket Lab remains powerful as in its first-quarter 2026 results, the company reported revenue of $200.3 million (approx. Rs 56 billion), up 63.5% from a year earlier, and said it exited the quarter with a record $2.2 billion (approx. Rs 615.1 billion) backlog.

It also signed 31 Electron and HASTE contracts, plus five dedicated Neutron launches in the quarter, bringing the total manifest to more than 70 contracted missions.

Separately, Rocket Lab disclosed an $816 million (approx. Rs 228.1 billion) Space Development Agency award for 18 satellites, one of the clearest signs yet that its business is no longer just about launch cadence.

Neutron remains the biggest catalyst.

In Rocket Lab’s latest 10-K, the company said a January tank failure pushed the first launch target to Q4 2026, which means the stock’s next leg will likely depend on execution rather than excitement alone.

Analysts still like the story as Stifel’s Erik Rasmussen lifted his price target to $105 and kept a Buy rating, while Investing.com’s consensus shows 15 analysts with an average target of $94.96 and a Buy rating.

Should retail investors follow ARK out the door?

Not blindly, as ARK has a habit of selling Rocket Lab into strength, and RKLB has a habit of keeping the rally going anyway.

That is why following Wood mechanically has often been a losing trade.

At the same time, Rocket Lab is no longer a cheap stock as the shares now trade well above the average analyst target, and investors have to factor in the risk of dilution after the company set up a $1 billion (approx. Rs 279.6 billion) equity distribution agreement in March.

That does not make the stock uninvestable, but it does mean the margin for error is thinner than it was a few months ago.