Market Outlook: S&P 500 and Promising Stocks

Over the last ten years, the S&P 500 index has surpassed its previous heights, tripling even amid challenges like the pandemic, inflation, rising interest rates, and geopolitical tensions. As we peer into the next decade, it’s likely that many of these hurdles will remain.

So, while it might be tempting to just invest in an S&P 500 exchange-traded fund (ETF), opting for dividend reinvestment and tuning out market fluctuations, there are some speculative stocks out there that could outperform the market. Let’s consider three of these intriguing options: AST SpaceMobile, Rivian Automotive, and QuantumScape.

AST SpaceMobile

AST SpaceMobile operates low-Earth orbit satellites that provide 2G, 4G, and 5G cellular services to mobile devices. These satellites can aid major telecom companies like AT&T and Verizon in extending their networks to remote areas lacking traditional infrastructure. Additionally, the company is developing satellites for the U.S. Missile Defense Agency’s SHIELD program.

In 2024, AST launched its initial five Block 1 (BlueBird) satellites, and in 2025, it followed up with four Block 2 satellites, which are significantly more capable than their predecessors. The firm aims to have between 45 and 60 satellites in orbit by 2026, and ultimately expand to over 240.

Analysts predict that AST’s revenue could skyrocket from $71 million to $1.92 billion between 2025 and 2028, given its customer growth and satellite launches. The company anticipates hitting profitability by 2027 or 2028, thanks to economies of scale. While a $26 billion market cap might seem steep at 14 times its projected 2028 sales, confidence in its future growth remains strong as more satellites launch.

Rivian Automotive

Rivian focuses on electric vehicles, producing models like the R1T pickup and R1S SUV. It also has plans for the R2 SUV and an electric delivery van for Amazon and others. However, the company faces challenges, with reduced production expected in 2024 and 2025 due to supply chain issues and increased competition in the EV sector.

Looking ahead, Rivian hopes that its new R2 SUV will expand its customer base since it’s priced lower than the R1. This approach could lead to improved profit margins as the R2 is less costly to manufacture.

Predictions suggest Rivian’s revenue could more than triple from $5.4 billion to $16.4 billion between 2025 and 2028, despite current short-term hurdles. Its $20 billion market cap might be perceived as reasonable, being less than three times this year’s sales. Should production ramp up, the stock could see substantial growth in the coming decade.

QuantumScape

QuantumScape is pioneering all-solid-state lithium metal batteries, which promise enhanced safety and efficiency compared to traditional lithium-ion options. Although these batteries are still in development—and thus not yet commercially available—they’ve been sampled by several major auto manufacturers.

Volkswagen is currently testing these batteries, and QuantumScape plans to license its technology rather than manufacture it directly. This strategy could allow for greater profit margins while minimizing losses.

Wall Street estimates that QuantumScape’s revenue could jump from under $1 million in 2026 to $545 million by 2028, as it commercializes its first product. Nevertheless, it may take some time for the company to reach breakeven. With a market cap of $4.2 billion, the stock valuation is currently substantial at eight times its anticipated 2028 sales, but if lithium metal batteries gain traction, it might find significant success ahead.