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With the machines taking over, it seems only appropriate to ask ChatGPT what it thinks about space stocks to buy. Specifically, which ideas in the public market command 10X potential given several years to work with? I was a bit surprised at the answers.
Let’s back up for a moment. According to ChatGPT, “[t]he space industry is experiencing rapid growth driven by advancements in technology, increasing private sector involvement, and government support for space exploration and commercialization.” Therefore, it makes sense to target space stocks to buy, which can encompass areas such as satellite communication, Earth observation, space tourism and space exploration.
In addition, the generative artificial intelligence platform noted the disruptive technologies that can sprout from the space economy and that have the potential to transform multiple industries. “Technologies such as reusable rockets, small satellites, space-based internet, and asteroid mining are opening up new possibilities for commercial activities in space and driving growth in related markets.”
I couldn’t agree more. But about the ideas – I’ll have to let you decide. Below are three space stocks to buy according to the chatbot.
Virgin Galactic (SPCE)
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If we’re specifically talking about space stocks to buy with 10X potential, I’m not surprised that ChatGPT selected Virgin Galactic (NYSE:SPCE). Let’s not kid ourselves – SPCE stock is risky as you-know-what. But just based on the numbers, a realistic possibility exists. Right now, shares trade at $1.60. A 10X move would bring that figure up to $16. At the peak, SPCE traded well above that mark.
So, SPCE stock just needs one more speculative fervor and it could get there. For its part, ChatGPT stated that its space tourism angle could be disruptive, pioneering a new experience for the wealthiest individuals. Further, the chatbot believes that increasing interest and demand for space tourism could allow Virgin Galactic to take a commanding market share. As well, economies of scale could make space travel more accessible.
Still, I have concerns. For 2024, analysts only see the company printing revenue of $5.31 million. That’s down almost 22% from last year’s tally. Also, 2025 sales could only be a bit over $3 million. So, SPCE may move in the wrong direction.
I’ll end on an optimistic note. Anything can happen in this market so it’s not impossible. Just be careful.
Lockheed Martin (LMT)
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From a business perspective, Lockheed Martin (NYSE:LMT) represents a more sensible choice for space stocks to buy. According to ChatGPT, it selected LMT stock for its diversified portfolio. Its corporate canvas covers various segments, including space exploration and satellite systems. Further, its wide reach enables Lockheed to capitalize on multiple growth opportunities within the space industry.
In many ways, though, LMT suffers from the opposite situation of Virgin Galactic. According to analysts, Lockheed should generate revenue of $69.43 billion by the end of the current fiscal year. That would come out to growth of 2.7%, which isn’t super impressive but it’s not negative. And 2025 sales may land at $71.89 billion, up 3.5% from 2024’s projected top line.
However, we’re talking about slow and steady growth. Currently, shares trade hands at nearly $432. So, for the price to 10X would mean a price of $4,320. I’m not 100% sure if I buy that.
However, is LMT one of the space stocks to buy? I believe so, not only for its space-oriented businesses but also its core defense units. After all, the world doesn’t seem to be getting any safer.
Northrop Grumman (NOC)
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Finally, we arrive at Northrop Grumman (NYSE:NOC). This is another surprising idea by ChatGPT because of its underlying conservative nature. The chatbot states that it picked Northrop because it plays a crucial role in the space industry. Specifically, it provides essential infrastructure, including spacecraft, satellite systems and space payloads. Further, the company’s products and services are integral to various applications, such as communication and Earth observation.
I don’t disagree with any of that. However, we’re talking about space stocks to buy with 10X potential. If, for instance, the chatbot was intrigued by Earth observation services, it could have looked at Planet Labs (NYSE:PL). Yes, of course, PL stock is super-risky. However, analysts rate shares a strong buy with a $4.71 price target. That’s 117% growth potential.
On the flipside, NOC rates as a consensus hold with a $480.38 average price target. That’s less than 5% up. Frankly, Lockheed Martin doesn’t rate that much better.
Nevertheless, analysts also see modest financial growth ahead. In 2024 and 2025, they project sales to land at $41.08 billion and $43.28 billion, respectively. I’m not sure about a 10X move. But it’s easily one of the long-term space stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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