In my podcast, Navellier Market Buzz, I said that I would rather play the aerospace suppliers, namely Carpenter Technology () and Howmet Aerospace (), rather than buy . They are a classic pick and ax play, and like the suppliers during the California Gold Rush, may make more than the miners.
The Wall Street Journal had an interesting article that SpaceX’s revenue comes from three sources, namely Grok AI, Starlink internet, and rocket launches. The WSJ pointed out that SpaceX is essentially a “trucking business” that charges businesses and governments to haul satellites into orbit. However, in the upcoming years, SpaceX’s Starlink business is expected to steadily grow and should cross over 10 million users this year. As a result, SpaceX is expected to eventually make more money from Internet subscriptions than rocket launches or Grok AI.
The good news for investors is that all three divisions of SpaceX are growing, but it will be interesting to see if the Starlink Internet business becomes more dominant as the WSJ article implied. The other interesting article came from Barrons, which said “Carpenter Technology: This Stock Will Melt Up” due to its pricing power and lack of competition. I rest my case that aerospace suppliers might be an even better way to profit from the SpaceX IPO craze.
Interestingly, the WSJ also had a great article about how Iran’s government-imposed Internet blackout in the past three months is crippling Iran’s economy since businesses have been disconnected from customers and suppliers. Many Iranian businesses have closed as a result, so unemployment is rising, and up to 10 million jobs may eventually be lost. The U.S. covertly sent thousands of Starlink satellite terminals into Iran after the regime’s crackdown on demonstrations earlier this year. Tens of thousands of Iranians use them to connect with loved ones domestically and abroad, and to share information outside the control of government firewalls and censors. However, owning a Starlink Internet system is illegal in Iran, and authorities have searched homes and roofs hunting for Starlink receivers who could face up to several years in prison if caught.
Quantum computing stocks are back in the news because the Commerce Department on Thursday confirmed that it planned to award $2 billion in grants to nine companies to foster the development of the domestic quantum industry. Both Rigetti () and D-Wave () have signed letters of intent with the government for $100 million in funding under the 2022 Chips and Science Act, which aims to spur research into emerging technologies. Under the terms of this pact, D-Wave will issue $100 million in common stock to the Commerce Department, so the federal government will have a vested interest in its potential success.