BigBear.ai, Palantir Technologies, GameStop, Reddit and Rocket Lab

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

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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 last earnings 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.

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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GameStop 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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