Shares of Moderna (MRNA 2.71%) zoomed as much as 33.3% higher this week, according to data from S&P Global Market Intelligence.
The maker of vaccines, including the mRNA vaccine for COVID-19, is amid a 90% stock price downturn. In fact, the share price is now only right around the same level as it was before the 2020 pandemic. However, this week, the company got good news with a mention of mRNA vaccines at the Project Stargate announcement and a new contract with the European Union.
As of market close on Friday, Jan. 24, Moderna stock is up 21.6% this week. Here's why.
Incoming AI vaccines?
Moderna works on mRNA vaccines, which use synthetic code to instruct the body to make specific proteins to fight a disease. The company is currently working on vaccines for RSV and the seasonal flu, as well as some rare diseases. However, right now, it is still seeing stagnating sales as fewer and fewer people get the mRNA vaccine for COVID-19. This is the key reason Moderna stock is in a 90% drawdown.
Nevertheless, artificial intelligence (AI) developments may supercharge the mRNA vaccine industry. At least, that's what Oracle CEO Larry Ellison believes.
Ellison mentioned using AI to help rapidly develop new vaccines as a benefit of Project Stargate, which is investing upwards of $500 billion in AI infrastructure in the United States over the next few years. Investors took this as a positive sign for Moderna stock, especially given that it could be an AI beneficiary. If you can use AI to make custom vaccines and cures for cancer, that could be a tremendous value to society and Moderna's business.
More important in the near term, Moderna announced today that it has been awarded a contract with the European Union for COVID-19 vaccinations. This should help with revenue growth and is another reason Moderna's stock popped this week.
NASDAQ: MRNA
Key Data Points
Should you buy Moderna stock?
Moderna stock is at a crossroads. Its market cap is down to $15 billion. Compared to revenue of $5 billion and $9 billion in cash on the balance sheet, Moderna is an interesting opportunity for a turnaround bet at current prices. It isn't earning much at the moment, with a small operating loss last quarter, but there is a ton of potential with its incoming vaccines and the long-term potential to supercharge its business with AI growth.
If you are a believer in mRNA technology, now may be a perfect time to load up on some Moderna stock. It could benefit from AI developments and is trading at a cheap price. The stock is not risk-free but could be a great long-term winner for those who buy and hold.
