A $21.9 Billion Government Contract Could Help Double Your Profits on This Tech Stock

0 | By Michael A. Robinson

If all goes according to plan, U.S. soldiers are about to get what promises to be game-changing technology for their helmets: an advanced augmented reality (AR) headset that will vastly improve communication and battlefield awareness.

As such, it’s the kind of force multiplier that would come in handy in a war against, for example, the Russians, who are continuing their siege of Ukraine.

With the military version of what was originally a civilian headset costing about $3,500 each, the total five-year contract for the tech’s creator comes to a stunning $21.9 billion.

Here’s the thing. The firm supplying the new devices is much better known for personal and cloud computing, as well as gaming, and ranks as one of the top names in tech today.

Let me show you why it’s set to double its earnings in as little as 2.5 years with the help of this new contract

Soldiers Get the Best Technology for Battle

Russia’s full-scale invasion of Ukraine, which started on February 24, shows the need for top-flight gear on today’s battlefield.

See, despite overwhelming numbers and much hype about its training and capabilities, so far, the Russian army’s advance has been extremely slow.

There are many reasons for this, of course. But one key reason appears to be that Russia’s soldiers on the ground are woefully under-equipped. Reports suggest Russian soldiers are using local Ukrainian cell phones to communicate with command, that they lack night-vision equipment, and have no jamming or missiles to protect them from Ukrainian drones.

With support from Microsoft Corp. (MSFT), U.S. soldiers are not facing a technological embarrassment like that as the U.S. Army is pushing forward with the company’s AR-equipped helmets.

Based on the civilian HoloLens AR headsets, the Army’s new helmets will overlay important information onto soldiers’ views of the battlefields.

We’re talking identifying friendly soldiers, enemy positions, ambushes, civilians to avoid, and areas where artillery will soon strike.

The headsets will also incorporate night-vision technology, which is an evolution of the HoloLens’s civilian uses.

These goggles are already used in industries like architecture, construction, and engineering, for example, to visualize plans and schematics in full 3D, allowing people to see how different parts will fit together and get out ahead of any potential problems.

Headsets like these play a key role in the virtual reality (VR) sector that was worth roughly $6.3 billion last year. By the end of 2028, this is a market that will be worth $84 billion, according to Fortune Business Insight.

Now, the Pentagon contract is for over 120,000 headsets set to get in the hands of U.S. soldiers in September. Over the next decade, the contract could be worth as much as $21.88 billion. That follows an earlier contract for the prototype version of this technology from 2018, worth $480 million.

And it’s all made possible by Microsoft the creator of the original HoloLens AR goggles and the Pentagon’s provider of the new Integrated Visual Augmentation System (IVAS) headsets.

These headsets are fancy, but on their own they can’t do much. They work in large part because they’ll all be networked together and with the U.S. Army’s larger data network – something that Microsoft, as one of the world’s largest cloud service providers, knows exactly how to handle.

In fact, that’s partly why Microsoft was originally awarded a $10 billion contract to provide the Pentagon with its own secure and global cloud service.

Now, most of the firm’s work is in the civilian world with its Windows operating system for PCs and Office suite of tools, both of which are the gold-standard across the world.

Microsoft also owns the Xbox gaming division, which creates a slew of games, has a gaming cloud service, and is responsible for the hugely popular Xbox gaming console. And with the upcoming $68.7 billion acquisition of gaming company Activision-Blizzard Inc. (ATVI), the largest acquisition in gaming ever, Microsoft will become the third-largest gaming company in the world.

Add to that a slew of cloud-related data and computing services under its Azure brand, where Microsoft makes a huge part of its money, and you can see that the tech giant has a huge presence in industry and entertainment.

This Stock has a 300% Return Compared to the S&P 500

Even with its stronghold on civilian technology, Microsoft remains committed to U.S. defense – which is a great play for investors right now.

To name just a few examples, Microsoft is the sole provider of productivity software to the Department of Defense’s 3 million-plus employees. It has also partnered with the Navy to use the Azure cloud datacenters to create an improved weather crucial for naval operations.

And that’s just a taste. According to Tech Inquiry, Microsoft has more than 5,000 subcontracts with the Department of Defense and law enforcement agencies.

As for the HoloLens deal with the Army, that’s actually a twofer for us.

The expertise that Microsoft will gain from deploying its AR technology with the Army will feed back to its civilian AR tech, and push forward its metaverse technology as well – which will be a huge source of growth for the company, as the metaverse market is set to explode to $8 trillion over the next two decades, according to both Goldman Sachs and Morgan Stanley.

The metaverse is all about using AR to overlay information from the digital world onto the real world and allowing people to interact with both as they move around the world. That’s pretty much exactly what Microsoft’s AR headsets for the Army will do, though in a much higher-stakes environment.
And there’s no questioning Microsoft’s history of trouncing the market. Over the past five years, the firm’s stock is up 325% compared to the S&P 500’s 80% gain.

So not only has Microsoft beat the benchmark 306% but the tech giant also has great earnings. Per-share, it’s growing at 28% a year and set to double in 2.5 years. That makes it a great way to build wealth in today’s volatile market.

But as Big Tech leaders like Microsoft pour billions of dollars into developing the metaverse, there are three smaller players you can invest in today for a chance at 1,000% gains over the next few years. Click here to find out how you can cash in on the metaverse today with two stocks and one crypto trading for less than $30.

Cheers and good investing,

P.S. For another market-crushing defense stock to add to your watchlist, check out this one that even pays a dividend.

Leave a Reply

Your email address will not be published. Required fields are marked *