Why the Afterpay (ASX:APT) share price is storming 8% higher

Here’s why this tech giant is on the rise today…

| More on:
A young man pointing up looking amazed, indicating a surging share price movement for an ASX company

Image source: Getty Images

The Afterpay Ltd (ASX: APT) share price has been a very strong performer on Friday.

In morning trade, the payments company’s shares are up almost 8% to $115.80.

Why is the Afterpay share price storming higher?

There appear to have been a couple of catalysts for the rise in the Afterpay share price today.

The first is strength in the tech sector after a positive night of trade on Wall Street’s Nasdaq index. The tech-heavy index stormed higher overnight after investors rotated out of value stocks and back into growth again.

It isn’t just the Afterpay share price which is charging higher today. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is up an impressive 3.6%.

What else is supporting its shares?

Also giving the Afterpay share price a lift on Friday has been a broker note out of Morgan Stanley this morning.

According to the note, the broker has retained its overweight rating and $145.00 price target on the company’s shares. Based on the current Afterpay share price, this price target implies potential upside of 25% over the next 12 months.

What did it say?

Morgan Stanley has been looking into the company’s proposed Afterpay Money offering. The broker is very positive on its plans and believes it has the potential to almost double its revenue in Australia.

In addition to this, it expects the offering to boost its core buy now pay later transactions, reduce processing costs, and generate high quality consumer data. Its analysts also see plenty of monetisation opportunities such as cashback offers.

An internal pilot team at Afterpay is currently working on a skeleton app in production with functioning deposit and savings accounts, with iterative prototype testing continuing with customers ahead of an expected launch in the first half of FY 2022.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares