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Important points
Interested in Joby Aviation, Inc.? Here are five stocks we like better.
Investors could look beyond the crowded AI software trade as first-half momentum slows and market breadth improves.
Joby Aviation, Archer Aviation, Rocket Lab, Intuitive Machines and AST SpaceMobile provide access to aviation, space infrastructure and satellite communications.
FuelCell Energy offers investors a speculative perspective on AI infrastructure as data centers look for faster on-site power options.
The first half of the trading year is typically based on a dominant market narrative. Over the past six months, this narrative has fueled massive booms in artificial intelligence (AI) and computing infrastructure. Starting in July, these storylines may lose momentum as investors reevaluate crowded deals and look for the next source of market breadth.
At the end of the third quarter, the portfolio managers have already secured their performance for the first half of the year for customer statements and are in the process of actively readjusting their risk models. Some institutional investors may currently be looking for a specific approach: an asymmetric risk-reward trade-off in sectors where there is a lack of capital.
→ MarketBeat Weekly Review – June 29th – 03.07
Institutions may be quietly reducing deadweight, locking in profits from crowded deals in the tech sector and positioning themselves for the next big market rotation. The goal for investors is to drive this institutional capital flow by targeting fundamentally sound companies anchored by large backlogs, concrete government contracts, and technical mean reversion setups.
Multiple compression: mathematics is catching up with technology
Mega-cap technology and pure AI software trading has historically been overcrowded and mathematically overwhelmed. The momentum concentrated in these names was based on a late-stage multiple expansion that cannot be sustained indefinitely.
→ Japan Catalyst from AST SpaceMobile brings its rollout story back into focus
When a software company trades at 30x forward sales, investors demand perfection in operational execution just to maintain current price levels. Any minor deviation from forecast or sales acceleration will result in margin reduction.
Capital managers are aware of this structural vulnerability. Any expansion in market breadth leaves these highly valued names vulnerable to rapid declines. Funds are actively abandoning these tired narratives to look for hard assets in the physical economy, seeking tangible value over speculative growth.
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On the rise: assembly lines replace R&D dreams
The advanced aviation sector is abandoning its origins in speculative research and development and evolving into a highly capitalized, government-certified manufacturing industry. Institutional capital favors operational milestones over conceptual blueprints.
Joby Aviation (NYSE: JOBY) recently provided a strong catalyst for large-scale commercial production. The late June filings formalize a strategic manufacturing alliance with Toyota Motor Corporation (NYSE: TM).
Toyota Motor Corporation now holds a 13.1% beneficial ownership interest and has established a 51% controlling interest in the newly formed preparation company dedicated to manufacturing Joby Aviation aircraft. Supported by a $500 million direct investment, this capital structure de-risks the commercial scale-up process. The transition transforms Joby Aviation from a visionary concept to a concrete operational business with an automotive industry giant running the factory floor.
In contrast, Archer Aviation (NYSE: ACHR) presents a textbook mean reversion engineering setup. Despite a 35% decline year-to-date, Archer Aviation’s underlying balance sheet is a fortress. Archer Aviation has $1.78 billion in cash and short-term investments, giving it a current ratio of more than 18x.
Institutional capitulation often signals a technical bottom. Prominent growth funds recently dumped large blocks of Archer Aviation stock near its 52-week low, flushing weak hands out of the market. Rapid progress in Federal Aviation Administration type certification and government integration programs validates the operational timeline and makes the current discount an attractive accumulation zone prior to pricing in regulatory approval.
Monopolizing Orbit: The New Vertical Space Race
The commercial space economy is currently transforming from experimental niche launches to large telecommunications and infrastructure duopolies. Billions in government subsidies and mergers are permanently changing the industry’s valuation models.
Rocket Lab (NASDAQ: RKLB) recently announced an $8 billion cash and stock acquisition of Iridium Communications. The broader market has not yet fully priced in the extent to which this changes Rocket Lab’s business valuation model.
By acquiring Iridium Communications, Rocket Lab vertically integrates into a leading space services company and secures high-margin recurring telecommunications revenue to offset the cash burn traditionally associated with launch segments. Supported by a 63.5% increase in first-quarter revenue to $200.3 million and a record order backlog of $2.2 billion, Rocket Lab is mispriced following recent, broader technology sell-offs.
A unique market dynamic is unfolding for Intuitive Machines (NASDAQ: LUNR). Short sellers often target capital-intensive space stocks because they assume management will heavily dilute shareholders to fund operations. Currently, 28.85% of Intuitive Machines’ public float is sold short.
However, Intuitive Machines recently secured a fixed-price contract for commercial lunar payload services from NASA worth up to $148.3 million. Securing large, non-dilutive government contracts to deliver lunar payloads provides a predictable revenue floor that negates the pessimistic thesis. The technical setup currently favors short squeeze mechanics driven by forced institutional backing of operational execution.
AST SpaceMobile (NASDAQ: ASTS) offers high-beta momentum stock as it nears commercialization of its direct-to-cell satellite constellation. AST SpaceMobile has a strong liquidity profile, with cash on hand of approximately $3.5 billion. A recent $926 million grant from the Japanese government to build a domestic satellite network with Rakuten (OTCMKTS: RKUNY) validates the technology at the government level. Capital rotation into space-based telecommunications will further increase pricing pressure for AST SpaceMobile.
Plugging in: The Backdoor AI Infrastructure Play
Data centers require enormous amounts of uninterrupted baseload power. Traditional energy networks are fully utilized, creating urgent macroeconomic tailwinds for off-grid energy solutions. FuelCell Energy (NASDAQ: FCEL) is well-positioned as a backdoor play on artificial intelligence infrastructure. The narrative around FuelCell Energy has shifted from traditional green energy to essential hyperscaler baseload energy.
The realization of a standardized energy block requirement of 12.5 MW for data centers, coupled with a financing package from the US EXIM Bank worth 49 million US dollars, fundamentally changes the balance sheet of FuelCell Energy.
Recent forced index purchases resulted in double-digit percentage increases following the addition of FuelCell Energy to the Russell 2000. FuelCell Energy was heavily pressured in the first half of the year and now offers a technical mean reversion setup supported by critical physical demand.
Act before the crowd: Finalizing a hardware strategy
Positioning portfolios for the second half of the year requires recognizing structural changes before they dominate financial headlines. The transition away from inflated software multiples toward tangible hardware, government backlogs, and low-risk manufacturing joint ventures provides a highly favorable asymmetric profile.
Allocating capital to fundamentally sound companies anchored by technical downside protection remains the most effective strategy to benefit from the upcoming institutional rotation in the third quarter. Let the smart money show you where the physical economy is headed and trade with confidence before the window closes.
The article “These Stocks Could Win as Wall Street Looks Beyond AI Software” was originally published by MarketBeat.
See MarketBeat’s top stocks for July 2026.
https://finance.yahoo.com/markets/stocks/articles/stocks-could-win-wall-street-143500484.html
