1 Stock I'd Buy Before Joby Aviation

Joby Aviation, an eVTOL SPAC veteran, has surged to an implied market capitalization near $14 billion (shares ~53% above its post-combination debut) but faces commercialization and FAA-approval uncertainty despite potential near-term opportunities in territories like Saudi Arabia and defense interest. By contrast, Kraken Robotics (market cap ≈ $1.7 billion) reported Q3 revenue of CA$31.3 million (up 60% YoY, ≈ US$22.5m), a 59% gross margin and net income of ~CA$3.3 million (≈10.5% margin), highlighting profitable, revenue-backed growth that the author argues makes Kraken a more attractive, growth-dependent investment than the more speculative Joby.

Analysis

Contrarian angles: Consensus overprices regulatory success probability for JOBY and underprices Kraken’s earnings durability — the market often rewards recurring-margin suppliers over capital-intensive OEMs (historical parallel: EV OEM hype vs battery supplier outperformance 2017–2022). Reaction may be underdone on downside: a single FAA setback could remove >50% of speculative premium in JOBY within weeks. Unintended consequence: successful foreign commercial launches (e.g., Saudi) could bifurcate liquidity and delay FAA scrutiny but also create multi-jurisdiction certification complexity that compresses OEM margins, benefiting nimble suppliers.

Key Decisions for Investors

• Establish a 2–3% long position in KRKNF (Kraken Robotics OTC) sized to portfolio volatility; target 12–24 month upside of 50–100% if growth >40% YoY and gross margin stays >50%; set stop-loss at -30% or trim if quarterly revenue growth falls below 10% QoQ.
• Establish a 1–1.5% tactical short position in JOBY (or synthetic via buy 3-month put spread ~25–35% OTM) to hedge eVTOL regulatory/certification risk; reduce/cover immediately if JOBY announces FAA ‘final rule’ certification or stock rallies >40% on confirmed commercial contracts.
• Implement a pair trade: long KRKNF 2% / short JOBY 1.25% to express supplier-over-OEM thesis; rebalance after each major catalyst (Q1–Q2 2026 earnings, FAA milestones) and close if spread narrows to <10% of initial notional.
• Reduce overall SPAC/eVTOL exposure by ~50% within 90 days and redeploy proceeds into defense/subsea tech and industrial automation ETFs or direct names (increase allocation by 2–4% to these sectors).
• Use options tactically: buy 6–12 month KRKNF call exposure if available (LEAPs) sized to 1% of portfolio; for JOBY, maintain 1% portfolio in rolling short-dated put spreads as insurance against certification misses, rolling or exiting on confirmed FAA approval.