Making sense of market moves
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With Space X CEO Elon Musk’s recent ascension into government circles and new technology making it cheaper than ever to launch rockets, investors are looking to the stars for out-of-this-world returns.
Shares of AST SpaceMobile have jumped over 25% in the last five days, marking a strong turnaround after dropping into the red after Trump’s presidential win. Given the satellite producer is a direct competitor of Musk’s (private) SpaceX, investors feared that AST SpaceMobile would have an immediate disadvantage in the Trump era given Musk’s role in shaping policy.
But analysts still see upside for AST SpaceMobile, arguing that its technical prowess means it can compete in an all-out “David vs. Goliath” fight with Space X, according to Scotiabank equity analysts. “We believe ASTS’s superior technology will prevail.”
Shares of the company are up 610% over the past 12 months.
Rocket Lab is another celestial name catching the attention of analysts and investors. The company, which produces end-to-end space equipment and launch services, beat Wall Street forecasts for its third-quarter results earlier this week, pushing shares up to a 12-month high on Wednesday.
Revenue increased 55% over its third quarter to $105 million thanks to a potent combination of more rocket launches than ever and a higher price for customers looking to hitch a ride to space.
A number of analysts, including Bank of America and Cantor Fitzgerald, raised their price targets on Rocket Lab after the earnings beat. Shares are up 30% over the past week and 301% in the last 12 months.
Intuitive Machines rose 7.12% this week after it, too, beat third-quarter expectations. The company made headlines earlier this year when its Odysseus lander became the first of its kind to land on the moon’s surface. Despite the fact that shares have risen about 236% over the past 12 months, analysts still see upside ahead. All six analysts covering the stock give it a “buy” rating.
Zooming out: While traveling to space may seem like a version of adult Legos for out-of-touch billionaires, it's not just the Bezos’s and Musks of the world who see opportunity in the solar system.
Given dramatic improvements in aerospace technology, combined with higher expected defense spending under the Trump administration, we can expect the commercialization of space travel to ramp up from here.
So even if you don’t dream of traveling to Mars, you can shoot for the stars in your portfolio.—LB