Do you own enough “sci-fi” stocks?
Today, the best-performing stocks aren’t in boring “real economy” industries like banks or consumer staples.
They’re in industries that, a decade ago, most investors would have dismissed as science fiction.
Think quantum computing, drones, and robotics.
This kind of stuff used to only exist in Hollywood movies. Today, they’re the leaders.
This is classic market behavior. Every bull cycle has its defining theme. In the 90s, it was dot-coms. In the mid-2000s, it was housing.
This time, it’s the companies pushing the envelope of what’s possible.
Take quantum computing.
IonQ (IONQ) has surged 76% this month. It’s up 873% over the past year:
Source: StockCharts
Rigetti Computing (RGTI)—another quantum stock—has also been going berserk. It’s soared 94% over the past month and more than 3,700% over the last 12 months:
Source: StockCharts
And that’s just one theme.
“Modular nuclear reactor” stocks have also gone vertical.
Oklo (OKLO)—a leader in this emerging field—has surged 572% over the past year, with a lot of those gains coming over the past few sessions.
Source: StockCharts
Robotics stocks have also been getting in on the fun. Richtech Robotics (RR) has nearly doubled since the start of the month:
Source: StockCharts
All of these stocks are in bleeding-edge industries. But that’s not all that they have in common.
You see, none of these stocks are “fundamentally sound.” Many haven’t even made their first sale. And none have profits to speak of.
What’s driving these stocks higher is simple. It’s all about hype and narrative.
Some investors take issue with that. But not me. I’ll trade anything as long as it’s moving up and to the right.
You just have to know how to manage risk. One of the simplest ways to do this is with proper position sizing.
Understand that these early-stage stocks are extremely volatile. They won’t all survive.
So, what’s the next hot sci-fi sector?
One group I’m watching extremely closely is drones. And one of my favorite stocks in the group is Ouster (OUST).
This $2 billion company powers the “eyes” of robots and autonomous machines with low-cost, scalable digital LiDAR. Its tech is already used in drones, industrial automation, and smart infrastructure.
The stock has been a top performer this cycle, rallying more than 400% over the past month. But, unlike the names mentioned above, it’s not extended. Instead, it’s been trading sideways for the past month:
Source: StockCharts
There’s a good chance that OUST breaks out of this consolidation pattern soon and becomes one of the market’s most talked-about sci-fi stocks again.
Justin Spittler
Chief Trader, RiskHedge
PS: Yesterday, I issued a new “Buy” recommendation in my Express Trader advisory for a stock that fits perfectly into the “sci-fi” theme. It’s a leader in the space market that’s been basing since June… and could soon move higher in short order.
To learn about it—and to get my three best trades at the start of every week—sign up for Express Trader today.
