The Age of Disruption will create fantastic winners over the coming years.
But turning those winners into your profits require precision, along with the courage of your convictions.
Of the hundreds, even thousands of companies competing at the bleeding edge of innovation, most lack any real staying power. Only the Vital Few will survive the melee and ultimately dominate future defining sectors such as artificial intelligence, EVs, energy storage, and robotics.
Occasionally, the rewards prove immediate – like the gains you pocketed on artificial intelligence company Upstart Financial (NASDAQ: UPST). You bought that stock at $116 towards the end of July along with some calls. Within less than a month, the stock surged nearly 90% and the calls gained over 390%.
Most, like Innoviz Technologies Ltd (NASDAQ: INVZ), demand a long-term, steady approach.
And some opportunities require nimbleness, like the trades you made to successfully step into the fuel cell sector…
Stepping Through the Rich and Cheap of Things
There are currently only four publicly traded fuel cell companies – Fuelcell Energy (NASDAQ: FCEL), Plug Power (NASDAQ: PLUG), Ballard Power Systems (NASDAQ: BLDP), and Bloom Energy (NYSE: BE).
In early August, all but Bloom Energy traded at truly hype-based valuations. And that rich valuation along with the weak technical price action for both Fuelcell Energy and Plug Power led me to recommend that you play the short side of those two stocks through puts.
I also suggested you buy shares in Bloom Energy while simultaneously selling covered calls against that position to offset the cost of the FCEL and PLUG puts. Bloom’s cheap valuation and the company’s ability to capture the bullish long-term growth prospects of fuel cell technologies made it a long-term play. But a rally didn’t look imminent, so writing calls against the stock provided a great opportunity to milk some income out of the position.
Thus, through a complex set of four trades playing both long and short opportunities, you stepped nimbly into the fuel cell sector.
And that nimbleness is paying off.
Off to a Good Start
Bloom Energy’s stock initially declined like the other three fuel cell stocks, though the price of PLUG and FCEL didn’t decline enough to place the puts in the money. The net result being that you pocketed the gains on those covered calls, fully offsetting the cost of the puts on PLUG and FCEL – which expired worthless.
But Bloom Energy has since staged a significant rally, with the position up over 23% from the time I recommended you buy it. Over that same span both FCEL and BLDP have declined, down over 4% and 3%, respectively, while PLUG, up 17%, has lagged BE.
Hydrogen as a viable fuel source only recently emerged as a viable option for energy generation. And as Bloom Energy reaps the rewards of fuel cell demand expected to double in less than three years, other players will emerge.
We want to find out about as many of those players as possible. The earlier the better. And that’s why I talk to people in the mix like Indranil Ghosh.
I shared my conversation with him last week. And today I want to point you towards a conversation Indranil recently had with Glen Martin – a rocket-scientist turned serial entrepreneur and the founder of Hyox Space.
Through 3D printing, AI, and autonomous robotics, Hyox Space intends to dramatically reduce the cost of generating clean hydrogen. And conversations like these provide an excellent opportunity to stay on top of the innovation’s Sixth Wave.
Finally, you should also consider buying stock in Similarweb Ltd. (NYSE: SMWB).
The company uses AI to compile real-time data sets from web traffic and sells that access to companies in a broad range of industries. The stock currently trades at less than $19 per share but looks poised to retest the $25 price level it reached back in August.
The company is young and still has a way to go before it’s profitable. But conditions can change quickly, especially with highly scalable AI solutions like Similarweb.
