The Nuix (ASX:NXL) share price is up 17% in a week. What's going on?

Why have investors changed their minds on the technology company in recent days?

| More on:
A happy woman in an office puts her hands in the air as if to celebrate while looking at computer.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) ended up having a fairly flat day of trading this Thursday, despite a short-lived midday rally. The ASX 200 ended up closing at 7,415 points, up a measly 0.02% for the day. However, the Nuix Ltd (ASX: NXL) share price performed even more poorly.

Nuix shares closed this Thursday at $2.97 a share, down 1% on the dot.

However, zoom out a little and the picture looks a lot prettier. Nuix shares have been on something of a tear lately, despite today's dip. Since last Thursday's close, the Nuix share price has risen from $2.53 to today's close of $2.97. That's a very pleasing gain of 17.39% in just one week.

This sudden rise would be a welcome change for Nuix shareholders. This company has made an unfortunate reputation for itself as something of an ASX initial public offering (IPO) flop. Since it debuted on the ASX boards last December, Nuix shares have had a pretty woeful time. When it IPOed back on 4 December 2020, this company quickly rose as high as $9 a share (up close to 70%). By January it had hit an all-time high of $11.86 a share.

But unfortunately for investors, that proved to be the best it got for Nuix, at least until this point in time. The company is now down more than 73% from those highs on today's pricing.

Nuix has been steadily falling since hitting that high watermark, bottoming out at a low of $2.16 a share back in June. Today's share price is the highest the company has seen since May.

So what's turned the ship around for Nuix over the past week or so?

Why has the Nuix share price staged a recovery?

Well, unfortunately, it's not clear why Nuix has been rising over the past week especially. There has been no major official news, developments, or announcements out of the company. It's possible some investors decided the company was too cheap to ignore at the levels it was asking a week or two ago, and decided to buy up shares.

It's also possible that investors have been influenced by some fund managers bullish on Nuix. One such fundie is Peter Switzer, founder of Switzer Financial Group.

As my Fool colleague Tony covered earlier this week, Switzer was extremely bullish on Nuix shares at their recent levels. Here's some of what he said:

Analysts believe [Nuix] has a target price that suggests it could go up 156%… Even if they're only half-right, I'd be happy with half of 156%…

It has huge customers in both the public and the private domain and it was a hugely successful company until all this misreporting really lowered the boom…The potential for the company still is certainly believable.

Perhaps investors took Switzer at his word.

Whatever the reason for Nuix's recent success, it will no doubt be received very warmly from this company's shareholders.

At today's closing Nuix share price of $2.97, this company has a market capitalisation of $942.42 million.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. 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 Bruce Jackson.

More on Technology Shares

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Five happy friends on their phones.
Share Market News

Goldman Sachs says these ASX tech stocks can rise 18% to 30%

The broker sees big returns on offer from these shares.

Read more »

A guy helps a girl lift a couch, both are laughing.
Technology Shares

3 of the best ASX tech shares to buy and hold until 2030

I think these stocks have exciting futures.

Read more »

A young woman uses a laptop and calculator while working from home.
Technology Shares

If I'd put $5,000 in Block shares 5 months ago, here's what I'd have now

Was it a good idea to invest in this payments stock five months ago?

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Technology Shares

Why is the Brainchip share price sinking over 7% today?

What's going on with this tech stock on Wednesday?

Read more »

woman working on tablet
Technology Shares

Missed out on Nvidia? My best ASX tech stock to buy and hold

Do you have FOMO after the US chip maker's share price rocketed? Here's an Aussie company worth backing instead.

Read more »

Three businesspeople leap high with the CBD in the background.
Technology Shares

Guess which ASX small-cap stock is rocketing 45% on 'pivotal moment'

Investors have responded very positively to an announcement.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »