Investors have plenty of trends that they can follow to profits. One of the easiest – or at least biggest source—of profits to follow is the massive amount of government spending. That’s led to some people investing in highly regulated utilities, or even in aerospace and defense contractors for steady profits.
However, times are changing. And the battlefields of the 21st century may not even have a physical location. There’s a tech-themed way to invest in this growing area of government spending.
That area is in artificial intelligence and big data. And companies like Palantir Technologies (PLTR) are leading the way. More importantly, the company finally reported its first-ever profitable quarter, and that the company may be attracting a potential acquirer.
Either way, that suggests some good upside for investors at or near today’s prices.
Action to take: Investors may like shares here, as the company’s move towards profitability will make it easier to value and analyze compared to a company that’s not yet profitable. And any acquisition offer will come in at a premium to the current share price.
For traders, the August $11 calls, last going for about $1.55, are a near-the-money trade. On a buyout announcement the options will be good for a big move higher. So if that happens in the next six months, this option could deliver high double-digit returns or better.
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.