What Happened?
A number of stocks jumped in the afternoon session after the broader market rebounded from a tech-driven sell-off, with investors taking the opportunity to buy stocks at lower prices.
This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Aerospace company Rocket Lab (NASDAQ:RKLB) jumped 8.8%. Is now the time to buy Rocket Lab? Access our full analysis report here, it’s free.
- Aerospace company Redwire (NYSE:RDW) jumped 13.8%. Is now the time to buy Redwire? Access our full analysis report here, it’s free.
- Defense Contractors company Kratos (NASDAQ:KTOS) jumped 9.3%. Is now the time to buy Kratos? Access our full analysis report here, it’s free.
- Electrical Systems company Vertiv (NYSE:VRT) jumped 8.9%. Is now the time to buy Vertiv? Access our full analysis report here, it’s free.
- Electronic Components company nLIGHT (NASDAQ:LASR) jumped 8.7%. Is now the time to buy nLIGHT? Access our full analysis report here, it’s free.
Zooming In On Redwire (RDW)
Redwire’s shares are extremely volatile and have had 106 moves greater than 5% over the last year. But moves this big are rare even for Redwire and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 26.5% on the news that it was selected for the Missile Defense Agency's (MDA) Scalable Homeland Innovative Enterprise Layered Defense (SHIELD) contract.
This indefinite-delivery/indefinite-quantity (IDIQ) contract had a substantial ceiling of $151 billion. The agreement encompassed a wide range of work areas intended to allow for the quick delivery of new capabilities to support homeland defense. It was important to note that this was a multi-vendor contract, meaning Redwire was one of several companies chosen. While the potential value was very large, the contract did not guarantee any specific amount of revenue for the company.
Redwire is up 11.3% since the beginning of the year, but at $10.05 per share, it is still trading 60.8% below its 52-week high of $25.66 from February 2025. Investors who bought $1,000 worth of Redwire’s shares 5 years ago would now be looking at an investment worth $878.67.
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