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GFAI Stock Alert: Why Is Guardforce AI Skyrocketing Today?

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A micro-cap stock many investors may not have on their radar, Guardforce AI (NASDAQ:GFAI), is taking off today. Currently, GFAI stock has accelerated more than 50% higher at the time of writing, on extremely heavy volume.

3d rendering ai robot think or compute AI stocks
3d rendering ai robot think or compute AI stocks

Source: Phonlamai Photo / Shutterstock.com

For investors in this leading security solutions provider, it’s been a rough few months. Officially, GFAI stock went public in September of last year, raising $15 million at $4.15 per share. However, shares dipped as low as $1.01 yesterday, hitting all-time lows. Today’s recovery brings GFAI stock to around the $1.60 level, still a loss of more than 60% for investors who bought in at the IPO. However, positive momentum is positive momentum.

Let’s dive into what’s driving GFAI stock higher today.

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GFAI Stock Surges on Geographic Expansion

Today, Guardforce AI announced the company would be entering into the “robotics as a service” business, via an acquisition of two companies. These companies, Shenzhen Keweien Robot Service Co., Ltd (SZ) and Guangzhou Kewei Robot Technology Co., Ltd. (GZ), are key players in AI robotics services. The companies aim to use automation to reduce repetitive tasks for companies. Accordingly, investors seem to like the synergies this deal can provide, bidding up shares of GFAI stock today.

Reports suggest this will be a mostly stock deal, with 10% of the proceeds being paid in cash. The deal is estimated to be worth $10 million and should be completed sometime next month.

Notably, reports suggest that this deal is being done at approximately 0.55 the five-year revenue of he combined SZ and GZ entities. At this sort of valuation, investors seem to like the potential upside with this integration.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

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