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Why Space Stocks Blasted Off Today


What happened

With the tech-heavy Nasdaq stock index up 2.5% as of 1:20 p.m. ET, it looks like investors have decided that Monday will be a “risk-on” day for the stock market. It’s no great surprise, then, that some of the riskiest stocks around — space stocks — are flying higher.

Here’s where some space stocks stood in midafternoon trading:

  • Astra Space (NASDAQ:ASTR) was up 9.3%.
  • Rocket Lab USA (NASDAQ:RKLB) has risen 10%.
  • Planet Labs (NYSE:PL) was up 11.2%
  • Virgin Galactic Holdings (NYSE:SPCE) was leading the pack higher with an 11.4% gain.
Four rockets launching each labeled 2022.

Image source: Getty Images.

So what

Is there a specific reason these space stocks are rocketing? Not for most of them, no.

No analysts have upgraded Astra, Planet Labs, or Virgin Galactic either. No bankers have raised price targets on this trio of space stocks. Neither have the companies themselves had any news of note to report today.

That being said, on Friday, Deutsche Bank came out with a note recommending that investors buy Rocket Lab, so let’s focus on that one today.

Now what

In its note, Deutsche Bank called Rocket Lab the “most promising rocket launch company after SpaceX,” which sounds like great news for Rocket Lab — though it’s a bit of a diss for Astra, Planet Labs, and Virgin Galactic. Deutsche Bank also raised its revenue forecast for the company and reiterated its buy rating on the stock, and its $18 price target, in a note covered by TheFly.com.

If Deutsche Bank is right about that, then investors who’ve patiently bided their time and waited for Rocket Lab’s stock to get cheap now have the opportunity to win as much as a 100% profit from an investment in Rocket Lab. That being said, the potential for gains from the other space stocks might be even larger. As TheFly points out, Rocket Lab stock has suffered a huge pullback in price, falling about 43% over just the last two months. But Virgin Galactic and Astra, down 44% and 57%, respectively, have fallen even farther, and Planet Labs is down nearly as much as Rocket Lab.

None of these stocks is currently profitable, of course, and whether they will turn out to be profitable investments in the long run remains anybody’s guess. Deutsche Bank thinks at least one of them will be a winner, however, and investors with a long investing horizon — one perhaps measured in light years — might want to take a (small) gamble that they can find even more gems in the space sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.





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