It’s a new year, and with it, a new initial public offering (IPO) season. And while we are already a month into 2022, we have already seen one impressive trading debut that has turned heads on Wall Street. Knightscope (NASDAQ:KSCP) began trading last week and gave investors plenty of reason to pay attention. The company has made security cameras trendy through its autonomous security robots (ASRs) and a slogan that invites investors to “short the criminals.” But despite announcing some good news today, KSCP stock is plunging.
What’s Happening with KSCP Stock
Knightscope has had a wild start to its life in the public markets. Shares plunged to a low of $5.91 on their first trading day, although they skyrocketed in the day following. As a result, KSCP stock is now up more than 145% since its IPO.
However, trading today seems to threaten this early success. Shares are down currently by more than 30%, not far from an intraday low of $14.50.
Why It Matters
Investors have plenty of reasons to be optimistic about Knightscope, though. The company announced today that it had secured a contract with a new client in the casino space. This presents the type of opportunity that often sends stocks up. Although general market momentum seems to be dragging KSCP stock down, the new contract suggest Knightscope has a path for growth in the long term.
Why? Importantly, the casino market is lucrative one for the security industry. It’s well known that gambling houses frequently find themselves in need of safety protocols. And the use of autonomous technology to monitor illegal activity on a casino floor could help streamline efforts to ensure that card counting and other forms of cheating are eliminated. There’s no denying that robotic security measures with artificial intelligence (AI) capabilities will be tempting for the entire industry. And Knightscope is well primed to help secure a share of this market.
Additionally, Knightscope’s technology has applications for many other industries. AI is already revolutionizing the security field as it helps eliminate human error. The demand for enhanced security features has only grown in recent years and isn’t showing any signs of slowing down. We’ve already seen theme parks implement autonomous security robots amid a shortage of human workers.
What It Means for Knightscope
All this bodes extremely well for KSCP stock. It also doesn’t hurt that Knightscope’s futuristic devices are already capturing the public’s fascination. The company has the potential to reach meme stock status if this trend continues.
As the first market breakout of 2022, KSCP is worth watching. Investors considering bullish plays on AI stocks should absolute be considering Knightscope. Today’s performance is not a reason to write if off.
On the date of publication, Samuel O’Brient 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.
