For Winning Results, Follow Winning Partnerships

The corporate world is full of mergers and acquisitions. But a partnership, which can allow companies to share their respective strengths, can often get overlooked. Investors who can find successful partnerships often have two potential companies to invest in.

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  • Even better, a great partnership may lead to an acquisition, which could mean a bigger return for investors who buy shares of the smaller company in a partnership.

    One recent partnership announcement comes from Nvidia (NVDA). The semiconductor leader has partnered with Snowflake (SNOW), for data-warehousing services. Snowflake has been a leader in cloud-based data services.

    And with a market cap under $60 billion, it’s also a relatively smaller player compared to Nvidia. Besides the buyout potential on a successful partnership, Snowflake is moving towards profitability and may have more immediate upside following Nvidia’s big run.

    Action to take: Investors interested in the tech space may like shares here, or on a pullback lower. As an early stage company, there’s no dividend. But Snowflake is a fast grower, with revenues up 48 percent in the past year alone before the Nvidia deal was announced.

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  • For traders, shares will likely trend higher. The November $200 calls, last going for about $16.00, could see mid-double-digit gains on a further rally. Shares are prone to some sharp volatility, so use a quick jump higher in shares to take profits.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.