For Immediate Release
Chicago, IL – December 27, 2024 – Today, Zacks Investment Ideas feature highlights BigBear.ai BBAI, Palantir Technologies PLTR, GameStop GME, Reddit RDDT and Rocket Lab RKLB.
Buy These 3 Speculative Stocks Now
The Animal Spirits Are Alive and Well
2024 has been one of the strongest-performing election years in history. With the Federal Reserve cutting interest rates and the “Santa Claus” rally phenomenon in full effect, the “animal spirits” are alive and well on Wall Street. Below are three momentum/speculative stocks to buy now to take advantage of:
BigBear.ai
BBAI Company Overview
Zacks Rank #2 (Buy) stock BigBear.ai is a software company focused on artificial intelligence and software products for the defense, finance, and healthcare industries. The company leverages AI solutions to gather massive quantities of data to help organizations and governments make well-informed decisions in complicated situations and conditions. Below are three applications for BBAI’s technology, including:
· Government & Defense: Government clients leverage BBAI technology for mission readiness and threat detection.
· Analytics: AI solutions allow companies to analyze large data sets like never before to make informed decisions.
· Commercial Applications: BBAI technology can help companies to optimize their supply chains and logistics.
Palantir Partnership
$200 billion Palantir Technologies is the juggernaut in the rather obscure yet critical and profitable market that BBAI operates in. However, the good news for investors is that BigBear.ai and Palantir announced a partnership earlier this year in which the two companies’ products will be “integrated to extend the operating system for the modern enterprise with data and AI that provide advice and other actionable insights for complex business decisions.” In a statement on the company’s website, BBAI management said, “Big Bear.ai will have an opportunity to extend Palantir’s products with its forecasting, course of action optimization, conflation, computer vision, natural language processing, and other predictive analytics via low-code interfaces. Building upon the agility and scalability of Palantir’s Foundry data and analytics fabric, BigBear.ai’s products will enable businesses to achieve return on investment faster with out-of-the-box optimization solutions for pricing, inventory and asset allocation, facility and operations management, and customer targeting - all buil to be sensitive to today’s connected economy through the inclusion of BigBear.ai’s global data for situational awareness and competitive intelligence.”
Bullish Chart Pattern & High Short Interest
BBAI shares have been exhibiting unusual strength recently. For instance, on Christmas Eve, the stock rose 17% on volume turnover that more than doubled, even though the market was only open for a half day. Currently, the stock is attempting to break out of a high-tight-flag pattern. If the breakout is successful, the heavy short interest (15% of the float) will likely add fuel to the fire.
Robust Earnings Expectations
Zacks Consensus Estimates suggest that BBAI EPS will grow by 64.29% and 77.27% over the next two quarters.
GameStop
GME Company Overview
Zacks Rank #3 (Hold) stock GameStop is a global retailer that sells video games, consumer electronics, and collectibles. GME is the world’s largest video game retailer, with over 6,000 stores in the United States and 17 other countries. GME sells hardware and software for Xbox, PlayStation, and Nintendo, as well as accessories and collectibles. They also offer a trade-in program that allows customers to exchange used games, consoles, and accessories for in-store credit or gift cards.
Equity Offerings Raise Cash Hoard
Unless you’ve been living under a rock, you are probably aware of the Reddit r/WallStreetBets group that orchestrated one of the largest short squeezes in history. Though GME has soared in recent years on little more than hype and gamma squeezes, the company can use its soaring stock price to its advantage. Following the most recent short squeeze, GME sold 75 million shares of its common stock to the public and raised more than $2 billion.
With so much cash on hand, GME management can expand the business or do something like add Bitcoin to its balance sheet (which would cause a signficant short squeeze). As part of its digital transformation efforts, GameStop has hired talented individuals with ecommerce, UI, UX, and blockchain expertise. The company has pursued growth opportunities in crypto, NFTs, and Web 3 gaming verticals.
Bull Flag Reset
One of the highest probability technical setups occurs when a stock has a strong run, resets in a bull flag fashion and tags the 10-week moving average. This is exactly what is happening with GME currently.
Highly Unusual Call Flow
A deep-pocketed option trader recently bought $3 million worth of the January $125 calls. The stock is currently trading at $30! Could the trader be the famed “Roaring Kitty” who sparked the initial GME short squeeze? Stay tuned…
Rocket Lab
RKLB Company Overview
Rocket Lab is an end-to-end space company that provides reliable launch services, spacecraft design and manufacturing, satellite components, flight software, and orbit management. RKLB specializes in launching small satellites into low Earth orbit (LEO) using their Electron rocket.
Bullish Catalysts & Contract Wins
In RKLB’s lastearnings call management touted several wins, including a multi-launch agreement with a confidential satellite operator, a record number of annual launches, with more scheduled next year, and $55 million in new launch contracts signed in Q3. Meanwhile, the company was selected by NASA to propose a mission architecture that enables faster and more cost-effective return of samples from Mars in a historic first. NASA contracts are notoriously lucrative and long-term.
A Growth Path Ahead
Third-quarter revenue increased 55% to $105 million year-over-year.
In addition, the company has a massive $1.05 billion backlog, representing 80% year-over-year growth. Furthermore, guidance of $125-$135 million means that Q4 will undoubtedly be the company’s best quarter ever.
Bottom Line
Investors can take advantage of momentum stocks when equities are in a bull market phase, the Fed is cutting, and the animal spirits are alive and well.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Free: See Our Top Stock And 4 Runners UpGameStop Corp. (GME) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
Rocket Lab USA, Inc. (RKLB) : Free Stock Analysis Report
BigBear.ai Holdings, Inc. (BBAI) : Free Stock Analysis Report
Reddit Inc. (RDDT) : Free Stock Analysis Report
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