It’s Thursday and as the market comes off it’s Juneteenth hangover, signs of a sluggish restart to the week seem far off. 

U.S. Futures this morning are gliding higher as it continues to cash checks and break necks, while our boy Elon Musk’s warns of AI annihilation (which is an absolute buzz-kill I must say).

But regardless, we have a lot heating up in the midst of this morning's trading session…

Which is why in today’s issue we’ve got all eyes on the $5 stock that’s taking Amazon and Tesla’s lunch money…

And of course, another episode of “WTF Elon…”. 

As always, let’s dive in! 

The $5 Stock Taking Amazon and Tesla’s Lunch Money

Move over, Amazon and Tesla; there's a new high-flyer in town, and it’s not just aiming for the moon—it’s shooting for your spot in the S&P 500. Not only is Rocket Labs (NASDAQ: RKLB) the underdog story Wall Street never saw coming… but this $5 stock has shot up 40% recently, and it’s got analysts buzzing like a swarm of bees around a spilled soda can. So, what’s the deal with this company that’s launching rockets faster than a politician that changes his mind?

Source: Prosple 

First up, Rocket Lab just inked a massive deal with Japanese firm Synspective for ten more launches. Ten! That’s like getting a lifetime supply of call options on your favorite meme stock. But this deal is a record for Rocket Lab and shows they’re not just playing with model rockets in their backyard. They’re the second most reliable launch company in the U.S. and one of the busiest globally. Basically, if Elon Musk is the rockstar of space, Rocket Lab is the indie band that’s about to blow up.

Analysts, who were previously trimming their targets like my overzealous aunt Nicky trims her garden, are now all aboard the Rocket Lab hype train. The consensus price target suggests a 35% upside for investors, which isn’t too shabby. Roth MKM analysts are loving the new deal for its pipeline visibility, while Bank of America praises Rocket Lab for its reusable technology and satellite components. Think of it as getting a reusable coffee cup that also brews your coffee and pays your rent.

Source: Space.com

Plus, Rocket Lab’s stock is like catnip for institutional investors. For six straight quarters, they’ve been buying it up, now owning nearly 72% of the stock. Big players like T. Rowe Price and Associates and Tocqueville Asset Management have increased their positions by 150% and 217%, respectively. The largest shareholders, VK Services LLC and Deer Management Co., hold about 25% of the shares. If this keeps up, institutional ownership could soon be higher than my cholesterol after a weekend binge.

**Is a Short Squeeze on the Horizon?**

Here’s where it gets juicy. Rocket Lab shares are heavily shorted, with a short interest rate of nearly 20%. This could lead to a short squeeze, forcing short-sellers to buy back shares and drive the price even higher. With ten days to cover, a short-covering rally might already be in the works. The stock could surge by another double-digit amount before hitting the brakes. But be warned, chasing this stock could land you in a bull trap faster than you can say “margin call.”

Another thing to take note of is that Rocket Lab’s is in a hyper-growth phase, expecting to accelerate growth to 72% this quarter. However, the company is still posting losses, which widened in the latest quarter due to increased R&D and expenses. Dilution is also an issue, with the share count up by 2.95% at the end of Q1 and more dilution expected this quarter. Share-based compensation and other dilutive factors could shave another 0.8% off the count. It’s like trying to fill a bucket with a hole in the bottom.

Yet, despite it’s growth phase struggles, Rocket Lab recently announced its largest Electron launch agreement ever—a ten-launch deal with Japanese Earth observation company Synspective. This announcement was made in Tokyo, with Rocket Lab founder and CEO Sir Peter Beck, Synspective founder and CEO Dr. Motoyuki Arai, and New Zealand Prime Minister Christopher Luxon all in attendance. Rocket Lab has been Synspective’s sole launch provider since 2020, successfully launching four missions for them so far. It’s like being the only bar in town—everyone’s coming to you.

Source: Synspective

**The Road Ahead**

So what does this mean in terms of price action? Well Rocket Lab’s share price is on a steep upward trajectory, and is no longer just the little company that could; it’s becoming the little company that did. With new deals, institutional support, and the potential for a short squeeze, Rocket Lab is a stock that’s worth watching. While there are challenges ahead, the company’s innovative approach and strategic partnerships position it for continued growth. So, if you’re looking to invest in a stock that’s aiming for the stars, Rocket Lab might just be your ticket to adding "Space Investor" to your Tinder bio. 

Elon Musk Warns of AI Annihilation: But Hey, Look on the Bright Side!

Alright, kids, gather around for the latest episode of "Elon Musk Says the Damndest Things." Our favorite billionaire tech mogul, who’s as comfortable in the boardroom as he is on the Twitter battlefield, has just dropped another bombshell that’s sure to make your existential dread levels spike. This time, Musk is warning us about the potential for AI to, you know, completely annihilate humanity. But don't worry, he says, "The glass is 80% full." So, we've got that going for us.

Source: The Decoder

AI: The Angel and the Demon

Musk, who’s pumping billions into AI development, paints a picture that swings between utopia and dystopia faster than a pendulum on speed. On one hand, he envisions a future where AI and robots lead to an age of abundance, complete with Universal High Income for all. Imagine a world where robots do all the tedious jobs, and we humans are left to pursue our passions—like binge-watching Netflix or perfecting our sourdough recipes.

But here’s the kicker: Musk also warns that this techno-paradise could trigger a massive crisis of meaning. With traditional jobs going the way of the dodo, people might struggle to find purpose in a world where work is optional. It's like winning the lottery and then realizing you’ve got no friends left to share it with.

Musk doesn’t stop at the existential angst. He’s also throwing in a 10-20% chance that AI could lead to our total annihilation. Yep, there's a one-in-five chance that our robot overlords might decide humanity is more trouble than it’s worth. But hey, let’s look on the bright side, right?

During a chat at the Cannes Lions International Festival of Creativity, Musk echoed the sentiments of AI godfather Geoff Hinton, agreeing that there’s a significant probability of something catastrophic happening. Yet, ever the optimist, Musk insists that we should keep our chins up because, well, it's the most interesting time in history. Kind of like watching a horror movie—you can't look away, even though you know it’s going to give you nightmares. Like this image:

Source: UNILAD

The Man with a Plan (Sort of)

Despite his warnings, Musk isn’t hitting the brakes on AI. Quite the opposite—he’s barreling full speed ahead with his own AI ventures. His new company, XAI, recently released Grok, a chatbot designed to be the edgier, snarkier cousin of ChatGPT. Because if we’re going to be destroyed by AI, it might as well have a sense of humor, right?

Musk’s ambitions don’t stop at chatbots. He’s also funding the development of Optimus, a humanoid robot created by Tesla that could one day replace manual labor. So while he’s cautioning the world about AI’s dangers, he’s also building the very robots that might put us out of a job—or worse. Sure Elon… makes sense. 

The Silver Lining?

Despite the dark predictions, Musk argues that the benefits of AI outweigh the risks. He’s even curious to see how it all plays out, suggesting he’d like to be around to witness the potential destruction of humanity. Because, why not? If you’re going to go out, you might as well have front-row seats.

In the end, Musk leaves us with a classic piece of advice: enjoy the ride. We’re living at the most interesting time in history, after all. Just remember to keep one eye on the sky and the other on your AI powered Roomba vacuum… 

Stocks.News has positions in Tesla and Amazon as mentioned in the article.