Stock Market

The U.S. economy in 2023 defied expectations with a strong performance, marked by low unemployment and robust job additions. While the outlook for 2024 suggests a soft landing with decreasing inflation, potential risks include geopolitical shocks, delayed interest rate cuts and shifts in consumer sentiment that could impact the economy’s trajectory. The overall economic surprises have been positive. That improved economic outlook for 2024 means innovation will persist, making the hottest space stocks a great place to start investing.

Spire Global (SPIR)

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Spire Global (NYSE:SPIR) is a leading global provider of space-based data, analytics and space services, offering access to unique datasets and powerful insights about Earth from the ultimate vantage point.

SPIR’s current price is $7.82. Its stock is up 89.81% in the past 6 months, maintaining its growth steadily. The global aerospace market size was valued at $321.5 billion in 2022 and is projected to reach around $678.17 billion by 2032, growing at a CAGR of 7.80% during the forecast period from 2023 to 2032.

SPIR’s year-over-year (YoY) revenue grew 34%. Its significant growth was further evident in its 15% increase in gross margins YoY to 65%.

The strength of its stock is its contracts with multiple aerospace companies. Spire Global uses its nanosatellites to collect data and has been making money from selling that data and related services to its clients. For example, Spire Global and other aerospace companies were selected for a NASA NOAA contract with a $476 million ceiling for all contractors over five years.

Yahoo! Finance reported that four analysts had a mean 1-year price target of $20.25, spanning from as low as $11.00 to as high as $26.00. Spire Global is expected to continue its rapid growth this year, making it the best space stock to buy for investors looking for a long-term investment. 

Rocket Lab USA (RKLB)

Source: T. Schneider / Shutterstock.com

Rocket Lab USA (NASDAQ:RKLB) is an aerospace company focused on designing and selling satellite parts and space launch systems. The company has quickly become one of the most launched rocket companies in the U.S., coming in second place only to SpaceX, the industry leader. It’s a contractor for both the United States Space Force and NASA. 

Rocket Lab is a prime beneficiary of the increase in satellite systems as internet usage and penetration continue to grow worldwide. Defense spending is a contributor as well, as space is the new frontier for future warfare. 

The company stands out amongst competitors for having the most speedy launches and vertical integration, where it is implementing an end-to-end solution. It can not only design and build satellites but also operate them for clients. 

Though the stock has fallen over 30% from its peak in the summer, Wall Street analysts give it an average price rating of $7.66, indicating it is undervalued. Since its fall in the summer, six out of eight analysts reaffirmed or initiated Buy ratings for the stock. 

Overall, Rocket Lab is a notable player in a fast-growing industry. Its fall in price could indicate it is undervalued and should be on investors’ watchlists in 2024. 

Howmet Aerospace (HWM)

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Howmet Aerospace (NYSE:HWM) is an aerospace company specializing in producing aerospace and defense application components like jet engines, fastening systems and gas turbines. HWM is up 37.32% year-to-date. Analysts give the stock 15 Buy ratings and forecast a median 12-month price target of $57.00, ranging from a low of $47.00 to a high of $66.00.

Howmet reported solid Q3 financials, with a 16% YoY growth in revenue to $1.66 billion. The main reason for the company’s substantial revenue growth was due to its commercial aerospace category, up 23% YoY. EPS also increased to $0.46, a 28% YoY increase.

Aerospace is HWM’s largest and fastest-growing market, and the company was able to capitalize on the global aircraft demand by increasing the production of aero engines and airframe structures. Howmet produced over 90% of all structural and rotating aero-engine components and invented over 90% of all aluminum alloys that have flown, a key component to its current success proving its capability to grow further. The company’s ability to generate revenue across all segments is fueled by increased build rates and gaining market share in titanium processing. With this competitive edge, Howmet is set for the long run.

Howmet Aerospace’s catalysts make it a great investment opportunity to watch this year among the list of the hottest space stocks.

On the date of publication, Michael Que did not hold (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.com Publishing Guidelines.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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