The hollowed-out rock, on a passing glance, appears to be just another ordinary rock. In reality, it is a secret cache of supplies fitting an assassin. However, the Lone Wanderer inadvertently looted the cache, not knowing who it belonged to.
The location is around the back of Megaton. You will usually be attacked by three to five mole rats, or vicious dogs very close to the end. On the world map, the rock is just west of due south of the Megaton icon, about 3/4ths of the way down the grid square. If you're having trouble finding it, look for a rock surrounded by three trees that are much shorter than the rest of the surrounding trees.
If you can't find the hollowed-out rock, let Dogmeat follow you and halt in the vicinity you believe the stash is nearby. Ask Dogmeat to find either chem, weapon or ammunition. Follow him as he runs to grab the loot.
A message just like the ones displayed for an open-able container says "open hollowed-out rock", so if you are having trouble finding it you can walk up to all the rocks in the area and look for the message.
If you decide to blow up Megaton, the hollowed-out rock will stay there despite sitting only 20–30 meters from the detonation area. The trees surrounding it, however, will not be there, making it more difficult to locate.
This rock formation is not found anywhere else in the Wasteland; unlike the others surrounding it, it is not recycled.
This particular location is the easiest way to obtain a sniper rifle very early in the game. It is also possible that sometimes, when you approach the hollowed-out rock, Sam Warrick might appear, and even though it may be challenging for a low level player, since Sam Warrick uses a sniper rifle, this can provide two sniper rifles possibly very early in the game.