The recent announcement by TMTG and Digital World Acquisitions Corp regarding the launch of a Trump-backed social media platform -TRUTH Social – has created headlines worldwide. As DWAC stock saw a 350% increase on the 21st, its ripple effects have created a sympathy play for Phunware Inc. (NASDAQ:PHUN) stock which has witnessed an over 280% increase in its premarket value on October 22nd – making it one of the hot stocks to buy now.

Catalysts

PHUN is an integrated software company that offers mobile application, location tracking, blockchain, and advertising software. PHUN’s most recent catalyst was its acquisition of the privately-held Lyte Technology Inc. Lyte is a rapidly growing system integrator with a loyal and growing customer base. With this acquisition, PHUN can begin entering the high-performance personal computer market.

The HPC market is currently valued at $32 billion with a staggering CAGR of over 20% over the next five years. If this holds true, the market will more than double in the next five years, offering a great market opportunity to meet the sector’s rapidly growing demand. As is, Lyte’s technology and following will allow PHUN to deploy its decentralized data economy powered by PhunCoin and PhunToken. Therefore, this acquisition is part of the company’s plans to expand into the crypto market to seize upcoming blockchain initiatives which could land PHUN stock among hot stocks to buy now.

While the company hasn’t released any news that would constitute the pre-market surge, the 280% increase is likely in tangent with DWAC’s run up because of PHUN’s link to former President Donald Trump. Partnering with American Made Media Consultants, PHUN developed the official Trump 2020 mobile application solidifying it as part of the network of services for the 2020 Trump-Pence reelection campaign.

Since the announcement of TRUTH social‘s launch, investors have begun speculating that PHUN is involved with the platform’s development. While no official announcements have been made, the speculation and momentum following gains from DWAC appears strong enough to drive PHUN’s value in a sympathy play – potentially landing PHUN on many investors’ lists of hot stocks to buy.

Over the last three months, PHUN has witnessed an over 40% increase due to their expansion and Lyte acquisition. Despite today’s tantalizing surge, PHUN was already expected to see a value change due to the company’s continuing growth. However, the runup has likely overvalued the company and a future value correction should be expected.

Media Sentiment

No more needs to be said @JohnRSpano1, but it seems like we’re all due a little PHUN @BMoeKnows.

Technical Analysis

Should You Buy?

Aside from the DWAC’s run, PHUN stock has already performed well over the last few months due to its business expansion – possibly making it one of the hot stocks to buy. PHUN’s operations in blockchain, crypto, and the HPC market all offer positive indications for the company’s future. But following DWAC’s news, PHUN stock value has soared to unprecedented levels.

Although buying shares during overbuying could pose a major risk, there could be short term gains to be made as DWAC’s run overshot almost all price targets. Once media attention dies down and the company is forced to confirm or deny its affiliation with TRUTH social, the stock could crash – especially considering mounting short interest.

Profit takers could cause a dip at market open, so investors looking for a good entry point may find one in the morning dip. But there’s no telling where the run will go from here.

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