All of a sudden, California-based QuickLogic (NASDAQ:QUIK) is in the financial press today. That’s because the U.S. government just awarded the semiconductor company a multi-million-dollar contract with rich extension options. As a result, traders are sending QUIK stock more than 10% higher today.
It certainly hasn’t been an easy year for semiconductor companies in the United States. However, the world — including the government — can’t do without semiconductors and related tech products.
So, when the U.S. Department of Defense needed help in this area, it called on QuickLogic. In particular, the company has committed to assist the department with field programmable gate array (FPGA) technology to support “identified and future Department of Defense (DoD) strategic and space system requirements.”
Of course, this is a huge win for QuickLogic. The DoD awarded the company a $6.9 million base contract. But there’s even more to the story; the contract also allows for options totaling as much as $72 million “over the span of multiple years.”
What’s Happening with QUIK Stock?
Like some other semiconductor-related stocks, QUIK stock has been unpredictable so far in 2022. However, today QuickLogic’s investors are firmly in the green as shares rally more than 10% this morning. At this rate, the buyers could take out the next resistance level of $9 any day now.
As you might expect, QuickLogic President and CEO Brian Faith is ecstatic about the big-money government contract. Faith stated:
“QuickLogic is honored to have been chosen by the US Government to lead this highly specialized and mission critical program.”
Notably, the company says in the press release that, if the DoD’s options are executed, QuickLogic “expects to expand the group of companies with which it will collaborate.” There isn’t much more detail on this, so it will be interesting to find out which companies QUIK ends up working with.
For the time being, though, QuickLogic stands to gain at least $6.9 million — and potentially many millions more. With that, QUIK stock is making a fast move as traders celebrate the big-money contract win.
On the date of publication, David Moadel did not hold (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.