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Virgin Galactic stock is soaring because of a far-off prediction about hypersonic air travel

Virgin Galactic stock is soaring because of a far-off prediction about hypersonic air travel
[Photo: courtesy of Virgin Galactic]

Now you know what to buy your 2040 self for the holidays: some shares of Virgin Galactic to hold for a long, long time.

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Virgin Galactic’s stock soared 18% today following a bullish rating by Morgan Stanley analyst Adam Jonas, who predicts that the company will eventually disrupt the multitrillion-dollar airline industry if its hypersonic air travel plans come to fruition.

That’s a big if. Virgin Galactic is currently a space tourism company in phase one of a three-part strategy. Hypersonic point-to-point air travel is not expected to arrive until the third phase, and in the meantime the company must develop hypersonic air travel technology while expanding its space tourism business. A proof of concept does not yet exist.

“We believe the key catalyst over the next 12 months will be sending even one customer to space and returning safely,” Jonas wrote.

Traders were undeterred, boosting Virgin Galactic’s stock, which has been down as much as 40% since October.

Jonas’s investor notes attract attention around Wall Street, following his accurate forecasts on stocks like Tesla. Today he gives Virgin Galactic stock a price target of $22 a share (it’s currently trading above $8) and predicts that hypersonic air travel will be a $800 billion market in 20 years.

Other analysts have recently rated Virgin Galactic stock a “buy,” though they focused on its space tourism business.

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