(Veteran tech columnist Jon Markman is the publisher of Strategic Advantage, a popular daily newsletter about the great digital transformation of business, entertainment and society -- and how to invest in it. Click here for a free two-week trial.)

Investors woke up Monday to more good news in the quest for a COVID-19 vaccine and the opportunities are only beginning. This is how to invest in the vaccine stocks.

Moderna ( (MRNA) - Get Report) execs announced Monday that their vaccine showed remarkable effectiveness in clinical trials. The results follow strong efficacy two weeks ago from a Pfizer ( (PFE) - Get Report) vaccine.

AstraZeneca ( (AZN) - Get Report), Johnson & Johnson ( (JNJ) - Get Report) and Fulgent Genetics ( (FLGT) - Get Report) might be better investments, though.

Making money off of the pandemic is not a good look for big pharmaceutical companies. In February, Democrat lawmakers wrote a letter to President Trump pleading that government funded vaccine be reasonably priced. Moderna managers ended up taking $955 million to develop a vaccine plus undetermined funds for 100 million doses. Pfizer, AstraZeneca and J&J declined developmental investment but will be reimbursed for doses. All have committed to supplying 100 million doses.

The kicker is the AstraZeneca and J&J vaccines are cheaper to produce at scale. The companies will end up making a profit as doses scale into the hundreds of millions, but it might not look like a windfall. This is a case of hard-nosed business managers running up against the vagaries of Washington and public opinion. In 2019, drug companies lavished $295 million on lobbying, leagues beyond any other sector.

One problem: vaccines from Moderna and Pfizer, while impressive, are hard to produce at scale. They use a relatively new RNA technology that attack the virus before it takes over our bodies. Unfortunately the tech has not been used in the past to produce actual vaccines at scale. 

The science is well explained in this short video.

AstraZeneca and J&J may be further behind but they’re making good progress with more traditional vaccines. Like the common flu vaccine, their approach uses killed or weakened versions of the virus to prepare our immune system for future COVID-19 exposure. The benefit is that drug makers know how to scale up production quickly. This means lots of doses for a relatively modest investment.

It’s a discrepancy Bill Gates knows all too well.

Gates, who co-founded Microsoft ( (MSFT) - Get Report) now devotes his time and money to world health and that makes him uniquely qualified to opine what companies are doing the best work.

In an August interview with Wired magazine, Gates correctly predicted early success from Moderna and Pfizer, followed by scalable vaccines using traditional approaches later. He also said most COVID-19 testing in the United States is complete garbage because it’s simply too slow.

Gates is clearly smart. He’s also really good at predicting the future.

Way back in 1999 when the internet was in its infancy he predicted smartphones, digital payments and social media. Today this tech is part of our everyday experience.

Since 2008 the Bill and Melinda Gates Foundation, with its $47 billion endowment, has been doling out huge investments for vaccines and drug treatments to fight disease all over the world. It’s the largest private charity in the world, building close relationships with pharmaceutical distributors and developers.

Gates knows what’s working, and what’s not.

He’s been an outspoken critic of domestic COVID-19 testing because the United States government incentivised the number of tests, not urgency. He argues the government should not pick up the cost of any test results that arrive more than 48 hours after the test. In his view this approach would fix the testing problem overnight and save taxpayers billions.

To be fair, Gates is bullish for Moderna Inc. and Pfizer. He says they are at the vanguard of the RNA vaccine hunt. And he is enthusiastic about more traditional vaccines coming first from AstraZeneca and Johnson & Johnson.

He also says Remdesivir, a therapeutic made by Gilead Sciences ( (GILD) - Get Report) has shown tremendous promise for the treatment of COVID-19. If doctors can prevent deaths from the virus, waiting for a vaccine is more palatable.

Based on the Moderna data that wait might be short. A company press release said phase III clinical trials met the statistical criteria with 94.5% efficacy. The vaccine also appears to work well for older COVID-19 patients and across diverse communities.

Dr. Stephen Hoge told the BBC News the company will apply to regulators in the United States in the coming weeks and hopes to have 20 million doses available.

The opportunity for investors is that the business prospects of AstraZeneca and J&J are being ignored. Shares are mispriced. Ultimately these companies will produce the lion’s share of COVID-19 vaccine doses. And they will produce them at a significant profit.

Investors are also getting testing wrong, especially in light of the plans of President-elect Joe Biden. A new administration is likely to incentivize speedy tests, like the ones made by Fulgent Genetics. The relatively small diagnostic company produces a reliable self-administered 24-hour test that has won huge contracts from Los Angeles county, and the New York public school system, the largest in the country.

Investors should buy AstraZeneca, J&J, and Fulgent. They’re the real bargains.