Markets Continue to Love Tech Stocks that Move to Profitability

Technology stocks offer investors the best bang for their buck. They’re the growth leaders and can see big price swings. Over time, a tech company that can go from an early-stage idea to turning an actual profit can continue to trend higher.

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  • The market still cares about these opportunities today, as interest rates stay high and early-stage investors remain skeptical. That’s good news for firms that can become consistently profitable.

    Big data company Palantir Technologies (PLTR) is sustainably profitable in the eyes of the market, now that it’s finally had its first full-year of profitability.

    The news sent shares soaring, and the company sees continued demand for its products amid an explosion in AI technologies getting rolled out.

    Palantir’s earnings have now jumped 202 percent over the past year, and revenues are up 20 percent.

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  • Action to take: While shares are now at a 52-week high, they still remain well under their 2021 highs.

    Palantir shares may take a short breather before trending higher. Investors should use down days to accumulate shares. Palantir is still a ways off from paying a dividend.

    For traders, the July $30 calls, last going for about $1.15, could be a high-double-digit or even low-triple-digit winner. Traders should look to scale into the trade in the coming weeks, using down days for shares to build a position.

     

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

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