Red Cat Holdings Stock Soars On Partnership With Palantir Ahead Of Q2 Earnings: Retail Suspects The Timing

Shares of Red Cat Holdings climbed over 14% on Monday morning after the company announced a strategic partnership with Palantir Technologies ($PLTR) to enhance its drone technology. 

The news propelled Red Cat into the spotlight, making it the third-highest trending ticker on Stocktwits.

Meanwhile, Palantir Technologies’ stock tumbled over 4% even as retail sentiment improved to ‘bullish’ from ‘neutral’ a day ago. 

The collaboration aims to integrate Palantir’s advanced visual navigation software and Warp Speed, its manufacturing operating system, into Red Cat’s Black Widow drones, with an aim to improve autonomous operations for military applications.

“Equipped with Palantir’s visual navigation and artificial intelligence, the Black Widow will be among the most capable drones ever fielded by the Department of Defense, compact enough to fit in a rucksack,” said Jeff Thompson, Red Cat CEO. 

While most retail investors on Stocktwits are bullish, some users view the announcement as a strategic hedge against potentially weak second-quarter earnings, set to be released after the market closes. 

Analysts project a $0.09 per share loss on revenue of $4.13 million.

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The company’s second-quarter results will be announced after the closing bell. Wall Street is expecting a loss per share of $0.09 on revenue of $4.13 million.

The timing of the partnership comes as demand for military drones surges amid rising geopolitical tensions. 

Retail investors on Stocktwits expressed optimism about the growing military budgets potentially boosting Red Cat’s revenue. 

However, CEO Jeff Thompson addressed unrelated speculation that the company’s drones might be behind recent reports of “mysterious drones” spotted across U.S. states, dismissing the claims in an interview with ABC News.

“We’ve been accused all week of possibly being the culprit,” said Thompson. 

“Maybe they’re trying to test them and trying to stay under the radar by doing it properly and according to law. But when we do all of our mission tests, we do midnight time,” he explained.

Red Cat’s stock has soared an impressive 994% this year, driven by bullish investor sentiment and growing interest in the drone sector.

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