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Why Focus Universal Stock Is Making Big Gains

By Keith Noonan – Oct 4, 2021 at 5:46PM

Key Points

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Despite volatile swings, Focus Universal stock is now up more than 135% year to date.

What happened

Shares of Focus Universal (FCUV -0.59%) made big gains in today's daily trading. The company's stock closed out Monday's daily trading session up 9.4%.

Trading on the stock was briefly halted due to volatility, and it looks like more big swings could be on the horizon. The company provides Internet of Things (IoT) hardware and software services, and its share price has made some big moves following the closing of its debut on the Nasdaq exchange.

Grid lines over a city.

Image source: Getty Images.

So what

Focus Universal went public on the Nasdaq stock exchange at the end of August and announced the completion of an additional public allotment offering in early September. The overall Internet of Things technology movement still has huge potential over the long term, but many individual companies that have a specialized focus within the space still have somewhat speculative outlooks.

It's probably fair to say that the IoT trend has progressed at a slower-than-expected rate compared to what many analysts and investors had expected five years ago. While the long-term trajectory for the IoT market still looks fairly promising, investors should keep in mind that small-cap players like Focus have uncertain business trajectories. 

Now what

Focus Universal now has a market capitalization of roughly $359 million. There's limited visibility into how much demand there will be for Focus's hardware and software services going forward. While sensor technologies and the overall IoT market will likely see strong growth over the long term, that doesn't necessarily mean that the company will be able to take advantage of broader industry momentum and emerge as a leading technologies provider. 

If Focus does manage to secure a lasting place in the IoT technologies space, there's a good chance that its stock price will be able to climb significantly above current levels. However, investors should proceed with the understanding that the company's outlook is still uncertain, and the stock is risky. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Focus Universal Inc. Stock Quote
Focus Universal Inc.
FCUV
$10.88 (-0.59%) $0.07

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