Satellite stocks rip as war shifts focus to defense spending

Traders seem to be settling on satellite stocks as a smart place to stash cash after the combined US and Israeli attack on Iran ignited a fresh war in the Middle East over the weekend.

Planet Labs, AST SpaceMobile, and Firefly Aerospace are all posting strong gains, as are related space plays like Intuitive Machines and traditional defense contractors like Northrop Grumman, which has a growing space services division.

Scenes of the aftermath of missile and drone strikes underscore the importance of imaging and communications technology offered by the low-Earth orbital satellite services some of these companies offer. Sadly, the scale of the destruction in the region suggests such services will be in heavy demand from governments worldwide for the foreseeable future.

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Matt Phillips3h

After losing retail interest, Palantir shares pop on Middle East turmoil

Palantir jumped in early trading Monday, with shares on track for their best day in weeks after the outbreak of war in the Middle East reinvigorated investor interest in a company that is an intelligence and defense contractor to the US and Israel.

Despite impressive recent business results driven by its corporate AI software division, Palantir has lost some of the previously rapt attention of individual investors, a group of shareholders who were a cornerstone of the stock’s more than 400% rise over the last two years.

In a note published last week, JPMorgan analyst Arun Jain, who keeps a close eye on trends among individual traders, noted that retail “paused PLTR purchases last September.”

The stock topped out not long after that, hitting a record of $207.52 in early November. Even after Monday’s bounce, the shares are down about 30%, having tumbled through key technical levels that confirm the downshift in momentum.

But with the attention of the markets now clearly on the war in Iran and the wider region, Palantir’s attributes as a defense and intelligence contractor for the US government — it took in $1.9 billion from US government customers last year, 42% of total revenue — as well as Israel seem to be getting the company a second look.

Luke Kawa4h

Nvidia gains after being named Morgan Stanley’s top pick in semis, striking two optical communications partnerships

Shares of Nvidia are on the rise in early trading Monday after Morgan Stanley called the world’s most valuable company its most attractive opportunity among semiconductor stocks and after management reached a pair of deals with optical communications companies.

Morgan Stanley analyst Joseph Moore writes that concerns about a peak in AI-driven demand should give way to optimism about Nvidia’s 2027 sales prospects.

“In each of the last three years, early in the year there was skepticism about the following year, and each time when visibility filled in and we realized the strength was durable, the stock had bursts of outperformance,” the analyst wrote.

He expects that Nvidia’s upcoming GPU Technology Conference, which the company is hosting from March 16 through 19, will enhance investors’ confidence about its ability to retain a dominant market position.

The analyst returned Nvidia to Morgan Stanley’s top slot, replacing Micron, which had taken the pole position in November from Sandisk, which had supplanted Nvidia back in September.

Per Moore:

“Memory vs. NVIDIA is an interesting debate. There is a commonly voiced view that memory stocks are pricing in a much longer and more durable cycle than processor stocks; we actually somewhat disagree with that. Our memory conversations with clients are very similar to NVIDIA conversations — a clear recognition that conditions are exceptional in both right now, But a very strong peak year at current valuations has been viewed as more investable for memory, because upward revisions are more dynamic. There is not much conviction about 2027 for either stock.”

As we discussed ahead of Nvidia’s earnings, memory has been the AI shortage that commanded more investor attention because that cohort was both cheaper and seeing more dramatic boosts to sales and earnings estimates than the $4 trillion chip designer.

Separately, Nvidia this morning announced a pair of $2 billion investments into Lumentum and Coherent, which includes purchase commitments for their optical technologies.

Max Knoblauch5h

Fears of increased global shipping costs add to Sony, Nintendo headaches

Video game console makers Nintendo and Sony are down in premarket trading Monday, amid a broad sell-off following US strikes against Iran over the weekend.

Both companies rely on cargo ships to transport consoles from factories in Asia to global consumers. An increase in shipping costs could add to the headache console makers are already facing from tariffs and sharply elevated memory prices.

Per Bloomberg, current rerouting plans to avoid the Suez Canal could add more than 10 days to deliveries.

Other factors are also dampening the stocks. Sony is facing a $2.7 billion UK lawsuit — with a trial set to begin next week — alleging that the PlayStation Store “has a near monopoly” on digital games and add-ons. Nintendo last week announced a roughly $1.9 billion share sale by major investors.

Luke Kawa

Lumentum and Coherent surge after Nvidia invests $2 billion apiece to develop advanced optics technologies

Jakarta welcomes New Year with fireworks

Speculative stock downturn accelerates amid Middle East conflict

The factors key to these speculative themes are out of favor.

Luke Kawa6h

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