Why Intuitive Machines (LUNR) Stock is Skyrocketing After $5 billion NASA Contract Award
Why Intuitive Machines (LUNR) Stock is Skyrocketing After $5 billion NASA Contract Award
The stock held its 50% gain to more than $8 per share in early afternoon trading today
- Intuitive Machines (LUNR) stock is surging after the company received a government contract.
- The award from NASA is for nearly $5 billion, representing a big win.
- A pullback is possible after the move as investors look to take profits.
Intuitive Machines (LUNR)—the American space exploration company—rose 50% through mid-day trading today, holding gains from pre-market trading after the company secured a contract with the National Aeronautics and Space Administration (NASA).
The lucrative contract with NASA will support the Artemis program, a campaign to explore and reestablish a human presence on the Moon. Ultimately, Artemis has the goal of putting a base on the Moon to help facilitate the exploration of Mars.
Intuitive Machines could take in up to $4.82 billion over a five-year period, with the option for an additional five-year contract. The deployment of lunar relay satellites from Intuitive will aid the Artemis program’s communication and data transmission services.
NASA previously used Intuitive to make the Odysseus, a NOVA-C lunar lander. It touched down on the Moon earlier this year and marked the first lunar soft landing since the Apollo 17 mission in 1972, although it did lose power after the landing. It was the first lunar landing by a private company.
That previous success likely influenced NASA’s decision to award the contract to Intuitive, and it also signals it can continue to win contracts. The new contract also represents a significant increase in financial terms, with this one vastly larger than the previous contract, which was about $120 million.
Investors are obviously excited not just by this week’s news but the broadening investment theme driving space exploration through commercial means. While NASA continues to play a key role, privatization has quickly evolved into a larger and larger chunk of the industry, with many players proving they can not only achieve the same operational success as a purely government-funded system but also that they can do it more cost-effectively.
Trading LUNR after the news
LUNR held its 50% gain going into afternoon trading today, with prices rising to the highest levels traded since February at above $8 per share. Despite the enthusiasm, traders often like to short these extremely large moves, the reason being that it invites profit-taking from investors who have been in the trade for a while.
That said, the most notable level of potential support is near the $6 handle, which is marked by the May swing high and several failed intraday attempts over the past month. However, the March swing high at 7.31 could also come into play if the move fades.
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Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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