Gorilla Technology Group (NASDAQ: GRRR) shares experienced a remarkable surge higher on Friday, with the stock soaring by 124% following breaking news. The company secured a significant contract for a massive smart government project in Egypt. The announcement ignited a flurry of buying and a surge in the stock's volume, indicating a potential transformation for Gorilla Technology Group.
The market response was highly positive, as the stock recovered a large chunk of its year-to-date losses. The record-breaking volume traded in the stock on Friday was a clear testament to the increased attention in the name from market participants. On Friday, a staggering 159 million shares were traded in GRRR, compared to its average daily volume of just 285k.
Shares Surge on Record-Breaking Contract Announcement
The London – based provider of security, network, and business intelligence announced on Friday that it has signed its largest-ever contract.
The company announced signing a contract with the Government of Egypt to implement a Smart Government Security Convergence solution. The three-year contract is worth over $270 million and is the largest customer contract in the company's history.
The company CEO, Jay Chandan, said: "This is the largest project we have ever won and, inclusive of our recent win in Taiwan, we have now secured $300 million worth of projects this quarter. We could not be more excited by our momentum and future."
Company Chief Innovation Officer Dr. Rajesh Natarajan said: "By integrating cutting-edge technologies such as AI, IoT, and data analytics, we are poised to revolutionize the way governments safeguard their critical assets."
Performance of GRRR
Shares of GRRR closed the day at $4.70, up close to 125%. While the performance on Friday was impressive, the stock remains down 42% YTD and well off its highs and critical resistance from earlier in the year, around $12.
However, the surge in volume is a significant change of character for the stock. In the past, the stock has never traded daily volume near levels seen on Friday. Therefore, not only has the trend broken, but so too has the sentiment and awareness surrounding the company.
From now on, Friday's close of $4.70 and intraday support of $4.50 will be a crucial support area that bulls will not want to see giveaway. Key resistance is $6, near the high from Friday, and a resistance level tested multiple times last year.
Should You Invest in GRRR?
The company mentioned that the deal puts the company on a path toward profitability by the end of 2024. With a market capitalization of just $141.28 million and $300 million worth of projects secured this quarter, Gorilla Technology is certainly making a strong case for an attractive growth investment.
However, after Friday's surge higher and an RSI of 88.75, the stock might be overbought in the short term and require consolidation and price stability before testing resistance around $6.
In the future, investors should also pay close attention to the upcoming earnings release set for August 30 to note whether the company's bottom line has improved and look out for better-than-expected guidance.