Why American Superconductor Stock Soared Today
What happened
Shares of electric grid enhancer American Superconductor (NASDAQ: AMSC) stock went off to the races Tuesday morning, galloping ahead 47.8% through 9:50 a.m. ET as investors snapped up shares ahead of the company's fiscal Q1 2023 earnings report.
American Superconductor announced yesterday that it will release Q1 results after close of trading on Wednesday, Aug. 9.
So what
American Superconductor didn't so much as hint at what its results might look like next week, however. So why is the stock up so much on a simple announcement that there will be news...of some sort...good or perhaps bad...a week from now?
Two answers suggest themselves.
First, in making its announcement, American Superconductor described itself not just as an electric grid contractor but also as an employee of the Pentagon, working to "protect and expand the capability of our Navy's fleet." I don't know about you, but not having looked at the company in a while, I found that surprising. But there it is in black and white in a press release from April 25: "AMSC Awarded Contract for U.S. Navy Deployable Mine Countermeasure System."
And further review reveals an announcement from December last year, in which American Superconductor says it's building "a high temperature superconductor (HTS)-based ship protection system to be deployed on the San Antonio-class of amphibious transport dock ship, LPD-32."
Well, what do you know? American Superconductor is a defense stock now!
Now what
And of course there's also the other thing. Over the weekend, The Wall Street Journal ran a story on Elon Musk's recent appearance at an electric utility conference, in which the Tesla (NASDAQ: TSLA) CEO predicted that rising demand for electricity to power both his own electric cars and everyone else's artificial intelligence programs was likely to cause electricity usage in the U.S. to triple by 2045.
Musk went on to predict electricity shortages in the U.S. as early as 2025 as this problem gets more acute. And while Musk didn't name American Superconductor specifically as the company that would help to fix this problem, I think investors today may be drawing the logical conclusion.
"I can't emphasize enough: We need more electricity," said Musk. And "However much electricity you think you need, more than that is needed." No wonder American Superconductor investors are optimistic.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
