The Orbital Compute trend is poised to create big stock market winners. Are you long yet?

In preview:

• The Orbital Compute trend is poised to create big stock market winners. Are you long yet?
• The world’s largest automakers reached new highs today. That’s not bearish.
• Four more bullish signs for the U.S. economy.
• The bull market in gold miners continues.

The Orbital Compute trend is poised to create big stock market winners. Are you long yet?

The AI data center boom is going orbital.

At least that’s what a lot of smart people in the technology world believe… so let’s talk about trading it.

Over the past few weeks, “AI data centers in space” – or “orbital compute” – has become one of the world’s most interesting and talked-about investment trends.

Technology leaders such as Elon Musk, Jensen Huang, and Jeff Bezos are investing heavily in technology related to building AI data centers on the ground… then launching them into space to orbit the Earth. 

This would place data centers in an area where power (in the form of solar energy) is abundant… and where the super cold vacuum of space keeps AI chips from overheating.

It might sound far-fetched, but many of the world’s smartest technologists have been investing here for over a year. Plus, as I’ve covered in the past, many of the best trades these days are based not on companies realizing actual revenue and profits… but based on the promise of them realizing actual revenue and profits. 

Over the coming months, we will be writing about the budding “Orbital Compute” trend. For now, we will mention one play passed along by our friend and colleague Luke Lango.

Rocket Lab (RKLB) is a $32 billion company that designs, builds, and operates rockets to carry satellites into space. It’s one of the few public firms that does so.

If the world’s richest technology companies are about to pay up to launch data centers into space, it will greatly benefit the tiny group of companies that can do the job at scale. Rocket Labs is one of them. And the uptrend you see below will run like an antelope.

Rocket Labs and its uptrend

The world’s largest automakers reached new highs today. That’s not bearish.

If there was an automaker ETF, it would be hitting an all-time high today. That’s bullish for the global economy.

Over the past three months, I’ve frequently highlighted the strength in economically critical firms such as Cummins (CMI), Caterpillar (CAT), steelmakers, and transportation firms as evidence that the economy is doing much better than the pessimists would have you believe. 

If these “real-world” economic indicators are soaring to all-time highs, the global economy can’t be doing too badly… and being long is a good idea.

Today, we can add the global automotive industry to the list of critical industries posting new highs. Today, mega automaker Toyota (TM) reached a 1-year high. American icon General Motors (GM) reached an all-time high. Mercedes-Benz Group (MBGAF) recently reached a new 1-year high.

And notably, Tesla (TSLA) – the world’s largest car company by market value – reached a new all-time high today. Of course, Tesla is a robotics company and an energy storage company, but no discussion of the auto industry bull market is complete without coverage of Tesla.

Few industries are as sensitive to global economic growth as the auto industry. It builds trucks and vans that deliver packages to our doorsteps. It builds rental cars and taxis that generate more revenue when the economy expands. And of course, we tend to buy newer and better cars when the economy is humming.

There’s no pure automaker ETF. But we can track these businesses as a whole and say they are in a bull market. We look at charts like the one of Toyota below and ask, “Can things be all that bad in the economy?” (Answer: No)

Toyota runs to new highs

Four more bullish signs for the U.S. economy

It’s not just automakers flashing bullish signals today. Many of America’s most important financial companies reached new highs today. That’s bullish as well.

Today, megabanks Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), and JP Morgan (JPM) reached all-time highs. This is more evidence that “things can’t be all that bad” for the U.S. economy. 

These four firms, and others like them, form the financial backbone of America. They rise and fall with America’s ability to make money, save money, start companies, invest money, service loans, and generally “get along.” 

When these companies plummet to new 1-year lows, it’s a dark warning sign. When they surge to new all-time highs, it’s a bullish sign.

As you can see in this 1-year chart of Bank of America (BAC), we’re getting clear bullish signs from the market. Invest accordingly.

Bank of America soars to new highs

Market Notes

• Gold mining giant Newmont Mining (NEM) reached an all-time high today. The bull market in gold miners continues.
• Health care giants Novartis (NVS), GSK (GSK), and Johnson & Johnson (JNJ) reached all-time highs today. The bull market in health care continues.
• Consumer spending giant Ralph Lauren (RL) reached a new all-time high today.
• Cement and construction aggregates giants Cemex (CX) and CRH (CRH) reached new 1-year highs today. These are bullish economic signals.