Why is the Megaport share price rallying 6% on Friday?

Could this spell a reversal for the beaten down tech share?
The post Why is the Megaport share price rallying 6% on Friday? appeared first on The Motley Fool Australia. –

Shares in Megaport Ltd (ASX: MP1) are shifting higher on Friday and now trade 6% in the green at $7.01 apiece.

The Megaport share price has traded 62% in the red since market activity resumed in January.

What’s up with the Megaport share price?

Despite no market-sensitive updates today, investors are bidding up Megaport shares today, despite a heavy selloff that’s ensued since late April.

In that time, the Megaport share price has come off a high of $12.76 with authority, a 45% drop, along with weakness in the broad sector.

For instance, the S&P/ASX All Technology Index (ASX: XTX) has collapsed 16% in the last month of trade after another 11% dip in the past week of trade.

However, there’s no denying that positive sentiment exists for Megaport, and some sophisticated investors are looking at this weak period as an opportunity.

“[W]ith the world moving more and more of computing into the cloud, the thematic tailwinds just cannot be denied for this ASX share,” said Tony Yoo of TMF earlier this week.

Yoo said commentary from Firetrail Investments supports this view:

“We continue to believe the medium-term growth opportunity for Megaport is significant and will be realised within a reasonable timeframe,” Firetrail said.

Meanwhile, analysts at Shaw and Partners noted that there is “definitely some value” in Megaport with its stock price trading around $8 at the time.

Megaport share price snapshot

In the last 12 months, the Megaport share price collapsed more than 46% into the red after extending losses well into the new year.

The post Why is the Megaport share price rallying 6% on Friday? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Megaport right now?

Before you consider Megaport, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Megaport wasn’t one of them.

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More reading

3 ASX shares destined for greatness: Firetrail
2 ASX shares that could surprise you in a year’s time
The Appen share price is soaring 5% on Thursday. Could this be why?
3 stellar ASX growth shares analysts are tipping as buys this month
These were the worst performing ASX 200 shares in April

Motley Fool contributor Zach Bristow 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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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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