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AI & Space Stocks: Two Megatrends to Ride Over the Next Decade
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Technology and innovation are the backbone of the global economy and the U.S. stock market. While there are times when commodity stocks, old economy companies, and value-oriented stocks can outperform, history teaches us that the most robust gains come from disruptive companies within the technology sector. For example, Meta Platforms ((META - Free Report) ) unique social media platforms caught fire in the 2000s and led to breathtaking profits for investors. Though Alphabet ((GOOGL - Free Report) ) was not first in the search engine arena, the company mastered search and later video with its YouTube platform. Jeff Bezos proved that e-commerce could be scaled through Amazon ((AMZN - Free Report) ).
It would take years for me to list even a portion of America’s success stories. The good news for investors who missed these moves is that the wheels of America’s top tech innovators are constantly turning. As investors, our job is to identify megatrends, uncover the top innovators, and ride the trends as long as possible. Below are my top two megatrends to watch over the next decade:
Space Stocks
Technological advancements (such as rocket reusability), efficiency gains, and the evolution of public-private partnerships are rapidly transforming the space industry from pipedream to reality. Though getting to this level has been a long and frustrating road, the “final frontier” promises fruitful rewards for successful space companies. McKinsey estimates that “the global space economy will be worth $1.8 trillion by 2035, up from $630 billion in 2023.”
Space Industry: Satellites and Defense
While accessibility to space has increased dramatically, profitability is still mainly prevalent in two areas: satellites and defense.
· Satellites:Intuitive Machines ((LUNR - Free Report) ) rocketed more than 50% today after NASA awarded the company a deal valued up to $4.82 billion to provide satellites to NASA’s Artemis program. Meanwhile, AST SpaceMobile ((ASTS - Free Report) ), a company building a space-based cellular broadband network, is up nearly 500% year-to-date.
· Defense: U.S. defense spending jumped from $320 billion in 2000 to over $800 billion in 2024.The trend of higher defense spending is highly unlikely to subside, especially as the world’s superpowers jockey for dominance in space. As a result, defense contractors like Lockheed Martin ((LMT - Free Report) ) should continue to benefit.
AI Stocks
Artificial intelligence has been discussed by technologists for decades. However, like the space industry, until recently, the AI industry was a pipedream. However, monumental breakthroughs in the semiconductor industry, mainly from Nvidia ((NVDA - Free Report) ), have led to new possibilities and a burgeoning mega trend. Below are three AI areas to watch:
· Chatbots: OpenAI made headlines recently as news fundraising talks could value the ChatGPT operator at a mind-boggling $150 billion. Though OpenAI and its largest investor Microsoft ((MSFT - Free Report) ), have to make strides in profitability, investors should not ignore the area industry that brought industry that brought AI to the public conscience.
· Data Center & Utilities: Large, energy-sucking data centers are required to build AI models that run large language models (LLMs). Names like Vertiv ((VRT - Free Report) ), which is a leader in AI infrastructure, and utilities likeVistra ((VST - Free Report) ) are “picks and shovels” to the upcoming AI gold rush.
· Robotaxis and Robots: Autonomous driving has already proven safer than today’s distracted human drivers. Tesla ((TSLA - Free Report) ) and other autonomous vehicle makers will make the roads safer and generate revenue by cutting out the need for human drivers in ridesharing services like Uber ((UBER - Free Report) ). Meanwhile, Tesla’s visionary CEO Elon Musk promises to unveil the Tesla Bot” robot in the coming years (the robot is already completing tasks for Tesla). With labor costs increasing, robots could be a way for companies to cut costs.
Bottom Line
Technological advances are at the heart of the most significant stock market advances. As the wheels of innovation continue to turn, investors should focus their research on burgeoning megatrends in AI and space over the next decade.
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AI & Space Stocks: Two Megatrends to Ride Over the Next Decade
Technology and innovation are the backbone of the global economy and the U.S. stock market. While there are times when commodity stocks, old economy companies, and value-oriented stocks can outperform, history teaches us that the most robust gains come from disruptive companies within the technology sector. For example, Meta Platforms ((META - Free Report) ) unique social media platforms caught fire in the 2000s and led to breathtaking profits for investors. Though Alphabet ((GOOGL - Free Report) ) was not first in the search engine arena, the company mastered search and later video with its YouTube platform. Jeff Bezos proved that e-commerce could be scaled through Amazon ((AMZN - Free Report) ).
It would take years for me to list even a portion of America’s success stories. The good news for investors who missed these moves is that the wheels of America’s top tech innovators are constantly turning. As investors, our job is to identify megatrends, uncover the top innovators, and ride the trends as long as possible. Below are my top two megatrends to watch over the next decade:
Space Stocks
Technological advancements (such as rocket reusability), efficiency gains, and the evolution of public-private partnerships are rapidly transforming the space industry from pipedream to reality. Though getting to this level has been a long and frustrating road, the “final frontier” promises fruitful rewards for successful space companies. McKinsey estimates that “the global space economy will be worth $1.8 trillion by 2035, up from $630 billion in 2023.”
Space Industry: Satellites and Defense
While accessibility to space has increased dramatically, profitability is still mainly prevalent in two areas: satellites and defense.
· Satellites: Intuitive Machines ((LUNR - Free Report) ) rocketed more than 50% today after NASA awarded the company a deal valued up to $4.82 billion to provide satellites to NASA’s Artemis program. Meanwhile, AST SpaceMobile ((ASTS - Free Report) ), a company building a space-based cellular broadband network, is up nearly 500% year-to-date.
· Defense: U.S. defense spending jumped from $320 billion in 2000 to over $800 billion in 2024.The trend of higher defense spending is highly unlikely to subside, especially as the world’s superpowers jockey for dominance in space. As a result, defense contractors like Lockheed Martin ((LMT - Free Report) ) should continue to benefit.
AI Stocks
Artificial intelligence has been discussed by technologists for decades. However, like the space industry, until recently, the AI industry was a pipedream. However, monumental breakthroughs in the semiconductor industry, mainly from Nvidia ((NVDA - Free Report) ), have led to new possibilities and a burgeoning mega trend. Below are three AI areas to watch:
· Chatbots: OpenAI made headlines recently as news fundraising talks could value the ChatGPT operator at a mind-boggling $150 billion. Though OpenAI and its largest investor Microsoft ((MSFT - Free Report) ), have to make strides in profitability, investors should not ignore the area industry that brought industry that brought AI to the public conscience.
· Data Center & Utilities: Large, energy-sucking data centers are required to build AI models that run large language models (LLMs). Names like Vertiv ((VRT - Free Report) ), which is a leader in AI infrastructure, and utilities likeVistra ((VST - Free Report) ) are “picks and shovels” to the upcoming AI gold rush.
· Robotaxis and Robots: Autonomous driving has already proven safer than today’s distracted human drivers. Tesla ((TSLA - Free Report) ) and other autonomous vehicle makers will make the roads safer and generate revenue by cutting out the need for human drivers in ridesharing services like Uber ((UBER - Free Report) ). Meanwhile, Tesla’s visionary CEO Elon Musk promises to unveil the Tesla Bot” robot in the coming years (the robot is already completing tasks for Tesla). With labor costs increasing, robots could be a way for companies to cut costs.
Bottom Line
Technological advances are at the heart of the most significant stock market advances. As the wheels of innovation continue to turn, investors should focus their research on burgeoning megatrends in AI and space over the next decade.