This little ASX tech share is skyrocketing 120% amid a deal with $33 billion energy company

A big contract win is putting a rocket under this tech share.

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The Pointerra Ltd (ASX: 3DP) share price is having a sensational finish to the week.

At one stage today, the ASX tech share was up almost 120% to 21 cents.

The 3D geospatial data technology company's shares have eased back since then but remain up a solid 67% to 16 cents currently.

Why is this ASX tech share skyrocketing?

Investors have been scrambling to buy Pointerra's shares after it announced a major contract win.

According to the release, the company's existing customer, Entergy Corp (NYSE: ETR), has selected Pointerra's US Engineer, Procure & Construct (EPC) partners for its 10-year, US$15 billion grid resilience CAPEX Program.

Entergy is a US$21.9 billion (A$32.7 billion) Fortune 500 company that provides power to 3 million customers throughout Arkansas, Louisiana, Mississippi and Texas. The release notes that the Louisiana-based energy utility company plans to spend US$15 billion on an electric grid resilience CAPEX program.

The company's Pointerra3D product will be used to process and analyse 3D LiDAR and 2D imagery to build a digital twin of Entergy's electricity network. This will then allow Entergy and its EPC contractors to use Pointerra3D's world-first quick load electric grid assessment tools to rapidly assess and prioritise the works to be completed in the most cost-effective and efficient manner possible.

Over the term of the program, the ASX tech share will be paid a price per pole/structure inspected and analysed using Pointerra3D.

At present, the company expects that up to 4 million poles could be inspected and analysed using Pointerra3D during this time.

And while a rate has not been finalised for this program, management expects it to be similar to previous rates of between US$20 and $40 per pole. This suggests that the contract could be worth US$80 million to US$160 million over its life, with revenue expected to commence during FY 2024.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Pointerra. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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