10 Hot Software Stocks with High Upside Potential

4) NextNav Inc. (NASDAQ:NN)

% Gain Over Past 6 Months: ~78.6%

Average Upside Potential: ~57.2%

Number of Hedge Fund Holders: 17

NextNav Inc. (NASDAQ:NN) is engaged in providing next-generation positioning, navigation, and timing solutions in the US. In Q3 2024, the company remains focused on advancing its strategic vision and addressing the critical need for a terrestrial complement and backup to GPS. Furthermore, it continues to work with relevant government agencies to deliver a solution that will provide significant public benefit. During the 3 and 9 months ended September 30, 2024, NextNav Inc. (NASDAQ:NN)’s revenue was mainly aided by higher service revenue from technology and services contracts with government and commercial customers.

A recent Brattle Group report highlighted that the adoption of NextNav Inc. (NASDAQ:NN)’s proposal to reconfigure the Lower 900 MHz provides the broader US economy the equivalent of a $10.8 billion insurance policy to protect against GPS outages without taxpayer funding, plus additional benefits of $3.8 billion from increased resiliency. Collectively, this brings the total quantified value of having a backup to GPS to $14.6 billion.

Laughing Water Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“NextNav Inc. (NASDAQ:NN) – Nextnav, our next-gen GPS / wireless spectrum investment, was our largest contributor to 2024 returns, and remains our largest position. At this time we are in a holding pattern with Nextnav as we wait for updates from the Federal Communications Commission (FCC) on the Company’s petition to update the rules that govern the 900 MHz spectrum band in a way that will allow for the creation of a terrestrial GPS system in the U.S., as well as ~15 MHz of 5G spectrum.

There is some uncertainty surrounding this process, but commentary from incoming FCC Chair Brendan Carr and other Commissioners suggests the chances for approval are favorable as terrestrial GPS is a National Security priority, and refilling the spectrum pipeline is an FCC priority.

The stock has been under heavy pressure in recent weeks as two different private equity funds – one a 2005 vintage, and the other a 2012 vintage – appear to have reached the end of their fund lives and are thus aggressively selling shares. I suspect this overhang will clear with time…” (Click here to read the full text)