Why is the Zip share price launching 7% on Tuesday?

What’s going on with the BNPL giant’s stock today?

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Key points

  • The Zip share price is in the green today, gaining 7.4% at its intraday high 
  • That's despite no news having been released by the company in weeks 
  • However, the company's stock has tumbled more than 10% over the previous 3 sessions. Additionally, the ASX tech sector is surging higher on Tuesday 

The Zip Co Ltd (ASX: ZIP) share price is in the green for the first time in nearly a week despite the company’s silence.

At the time of writing, the Zip share price is $1.54, 4.93% higher than its previous close.

However, earlier today, it reached an intraday high of $1.58 – representing a 7.48% gain.

Its surge follows 3 consecutive sessions within which the stock tumbled more than 2.5%. In fact, before today the Zip share price hadn’t recorded a gain since last Wednesday.

So, what’s driving the buy now, pay later (BNPL) giant’s shares upwards on Tuesday? Let’s take a look.

What’s boosting Zip’s stock today?

It’s a good day for ASX tech shares, and BNPL giant Zip (though, technically not a tech share) is among the winners.

Right now, both the S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) are up around 0.8%, with the tech sector coming in as one of the market’s major buoys.  

The S&P/ASX 200 Information Technology Index (ASX: XIJ) has launched 3.52% higher at the time of writing. Meanwhile, the S&P/ASX All Technology Index (ASX: XTX) has surged 2.73%.

The ASX 200’s best performing tech stock on Tuesday is Block Inc (ASX: SQ2) ­– the owner of former market favourite and Zip competitor, Afterpay. It’s currently up 7.61%.

Brushing elbows with the winner are Appen Ltd (ASX: APX) and Life360 Inc (ASX: 360), having gained 7.43% and 5.06% respectively.

Zip’s takeover target Sezzle Inc (ASXL SZL) is also in the green today, rising 4.12% to trade at $1.39.

The broader tech market’s gains might be helping to drive the BNPL stock upwards.

Additionally, the Zip share price’s surge might be a market correction after it was dragged 10.91% lower over the course of Thursday, Friday, and Monday.

Zip share price snapshot

Unfortunately, today’s gains haven’t been enough to drag the Zip share price out of its recent slump.

Right now, the BNPL company’s share price is 64% lower than it was at the start of 2022. It has also fallen 79% since this time last year.

The ASX 200 stock is also trading a whopping 85% lower than its 52-week high of $10.61, which it hit in April 2021.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd, Block, Inc., Life360, Inc., and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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