It's like the sell-off never happened. The Afterpay Ltd (ASX: APT) share price has clawed its way back up to a 4-month high and is trading 6% higher to $130.35 at the time of writing.
Afterpay shares have demonstrated extraordinary signs of strength this month in particular, launching ~40% from $92.77 at the start of June to more than $130 today.
Let's take a look at what factors might be driving Afterpay's comeback.
Afterpay expands 'one-time card' offering
One factor which could be driving the Afterpay share price today is the expansion of its buy now, pay later (BNPL) service to some of the largest US online brands.
On Wednesday night, Afterpay revealed that it had onboarded high profile retailers such as Amazon.com Inc (NASDAQ: AMZN) and Nike Inc (NYSE: NKE) to its one-time card feature on the Afterpay app.
This feature will allow customers to generate a one-time card to enter at checkout for participating retailers.
Tech bouncing back
Broadly speaking, it's been a somewhat frustrating year for ASX tech investors.
The S&P/ASX 200 Info Tech Index (ASX: XIJ) staged two sharp ~20% sell-offs during 11 February to 9 March, and 19 April through to 13 May.
The main stocks driving the ASX 200 tech index lower were heavyweight names including Afterpay, Xero Limited (ASX: XRO), NextDC Ltd (ASX: NXT) and WiseTech Global Ltd (ASX: WTC).
The index has since rallied a solid ~25% off May lows, with many ASX 200 tech shares rebounding back to 1–3 month highs.
A similar narrative has taken place on Wall Street.
The tech-heavy Nasdaq Composite experienced a ~10% sell-off in late February and an ~8.5% pullback in late April/early May.
On both occasions, the Nasdaq bounced back strongly. And on Wednesday night, it managed to eke out a 0.13% gain to close in record territory.
The recent resurgence and investor appetite for tech is another factor that could be helping to drive the Afterpay share price to a near-term high.
Large cap BNPL shares pushing higher
Afterpay isn't the only BNPL share bouncing off near-term lows.
The Zip Co Ltd (ASX: Z1P) share price has staged a similar comeback, surging 22% from $7.04 at the start of June to its current level of $8.59 at the time of writing.
Another key player in the BNPL industry is US-listed Affirm Holdings Inc (NASDAQ: AFRM).
Affirm boasts a market capitalisation of about US$17 billion (A$22 billion), and is currently solely focused on the North American region.
The Affirm share price has bounced a similar ~35% off its May lows to US$65.19.
