Investors have a tech flavor of the year, and it’s artificial intelligence (AI). That’s in contrast to past years, when investors have been enamored with cloud services, cryptocurrency mining, electric vehicles, or any other number of trends.
Those trends have staying power too. And since they’re now not the market’s favorite, it’s possible to buy into long-term potential winners at a better price. The best time to buy these tech trends isn’t just when they’re out of favor, but when they’re making positive strides forward.
That’s the case with space tourism stocks right now. The hype that sent shares of companies like Virgin Galactic (SPCE) into orbit led to an equally steep drop when it move out of favor.
Now that Virgin has successfully completed its Galactic 01 flight, however, they’re on the path to build out an industry lead in the space tourism business.
Action to take: Shares are a speculative buy here. If space tourism takes off, Virgin will likely be an industry leader. And its current market cap of about $1.1 billion will look inexpensive once that pans out.
For traders, the successful launch didn’t do much for shares. The January 2024 $4 calls, last going for about $1.20, could see mid-double-digit returns if good news continues to trickle in for Virgin Galactic in the second half of 2023.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.