When it comes the stock market, timing is everything. And the timing has never been more perfect for Virgin Galactic (NYSE:SPCE) stock — that’s why I’ve added SPCE stock to my Innovation Investor portfolio, which is focused on investing in the most innovative, disruptive technology companies that are fundamentally changing the way the world works, with the goal of achieving 2X, 5X, even 10X returns

At the current moment, SPCE stock finds itself at the epicenter of four huge trends in the market:

  1. The beginning of commercial space tourism operations.
  2. The return of meme stocks.
  3. The rising fear of big short squeezes.
  4. The re-emergence of the growth trade.

All four of these market-defining trends have staying power. All four of them will help drive Virgin Galactic stock significantly higher over the next few months.

To be sure, shares of the commercial space tourism company have already doubled over the past two weeks, since the company’s successful May test flight. But I think this rally simply marks the beginning of a big breakout to new all-time highs.

The previous all time high on SPCE stock? A hair over $60. So, yes, I think SPCE stock can and will double from here before the end of 2021.

Here’s why:

SPCE Stock: Space, Here We Come

For over a decade, the world has awaited the launch of commercial space tourism operations that actually fly folks into space. It looks the wait is finally over.

Just two weeks ago, Virgin Galactic successfully completed a flawless, full test-flight of its commercial space ops with pilots and a payload, while next month, Jeff Bezos, his brother and the winner of an auction will be flown into space aboard the Blue Origin rocket. Virgin Galactic is also supposed to fly its Chairman, Richard Branson, into space soon.

The boom has arrived.

For over a decade, space tourism companies have been testing, and testing and testing. Now, the real stuff begins. Over the next twelve months, the science-fiction concept of space travel will turn into a reality. And by mid-2022, Virgin Galactic and Blue Origin will be regularly flying people into space every month.

As commercial space travel does become a reality, space travel stocks will soar — headlined by the best-known space travel stock of them all, SPCE stock.

The Return of Meme Stocks

Virgin Galactic is a space tourism company. But SPCE stock also doubles as a meme stock — or a stock preferred by the retail traders that flock into momentum trades based on what’s mentioned on social media boards across the internet.

According to Bank of America, SPCE stock is the third-most mentioned stock on Reddit.

That’s important, because meme stocks are making a big comeback right now. GameStop (NYSE:GME). AMC (NYSE:AMC). Koss (NYSE:KOSS). Bed Bath & Beyond (NASDAQ:BBBY). They’re all making huge moves right now, as retail traders have once again banded together to influence stock prices.

As we saw the last time this happened — late January and early February — these social momentum trades can last for a while. And they can leave stocks at a permanently high level.

With SPCE stock caught up in the frenzy, that is simply more firepower to help push and keep Virgin Galactic stock prices even higher in the coming months.

What About that Short Squeeze?

One consistent feature of meme stocks is that they tend to be heavily-shorted stocks. Most of them have a short interest north of 20%. That’s because retail traders believe that in those stocks, they can add some extra “juice” to the rally by squeezing the short-sellers and forcing them to cover, thereby adding more buying pressure to the stock.

SPCE stock has a short interest as a percent of its float at 21%.

That’s high — high enough to spark a short squeeze.

Indeed, I think a big short squeeze is very likely. There’s simply too much momentum between all the space travel news and the meme stock reemergence to not attract a lot of buyers into this name, which will in-turn spark a huge rally and subsequent short covering.

The stage is set here. SPCE stock is ready to take off like a rocket.

Growth Is Back in Favor

Also of note, growth stocks have come back into favor recently. That is, throughout February, March, and April, growth stocks were punished as the reflation trade took center stage and yields surged. But yields have flattened out in May and June. The reflation trade has unwound. And growth stocks are rebounded with vigor.

I think this dynamic will persist. The economic recovery is slowing. Production bottlenecks are getting smoothed. Inflation will calm down. The reflation trade will lose more momentum. Yields will stay flat. Growth stocks will keep bouncing back.

Rising tides lift all boats.

SPCE stock is a growth stock. Thus, the rising tide of growth stocks will help lift SPCE stock higher over the next few months.

Bottom Line on SPCE Stock

Virgin Galactic represents a compelling play on the burgeoning Space Economy — which, in it of itself, may be one of the best investment megatrends of the 2020s.

Investing early in space stocks today, could be like investing early in internet stocks back in the 1990s. That is, space stocks today are on the precipice of enormous growth over the next 10 to 20 years.

There’s an entire economy brewing in space travel, from space tourism to space stations with artificial gravity, and so much more…

SPCE stock is one such explosive stock.

— Luke Lango

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Source: Investor Place