Why Lightspeed Stock Popped Nearly 10% Today

Recent gains in LSPD stock could just be the start of an expected spectacular long-term rally.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published April 4, 2022 1:41 pm EDT

What happened?

The recovery in Lightspeed Commerce (TSX: LSPD)(NYSE: LSPD) stock seems to be gaining steam on Monday. After inching up by 8% last week, the TSX-listed LSPD stock was trading with close to 10% gains today at $42.68 per share at the time of writing. If it manages to maintain these gains in today’s trading session, it will mark its highest closing level since February 1.

So what?

It’s important to note that most tech stocks are witnessing a sharp rally across North America today, as the tech-heavy NASDAQ Composite Index in the U.S. jumped by more than 1.5%. This sector-wide rally could be one of the reasons why LSPD stock popped by about 10% today.

In one of my articles, I’d highlighted how Lightspeed Commerce made some key changes to its top leadership on March 24 and highlighted its rapidly growing business. The Canadian tech firm created a new chief operating officer role to keep an eye on the company’s operating effectiveness. Also, it recently hired Rani Hammond as its new chief people officer to strengthen its human resources team.

However, LSPD stock failed to rise even after this seemingly positive announcement due to a tech sector-wide selloff amid rising inflationary pressures and ongoing geopolitical tensions. But when the tech sector turned positive last week with investors’ rising hopes from the Russia-Ukraine negotiations, Lightspeed stock outperformed most of its peers to lead the rally. I see today’s sharp gains in LSPD stock as an extension of last week’s positive momentum.

This could be one of the reasons why LSPD stock is outperforming its Canadian peers today as well. Monday morning, tech stocks like Shopify and Nuvei were trading with 5% and 3% gains for the day, respectively.

Now what?

Despite the ongoing strength in its financial growth trends, Lightspeed stock has been one of the worst-performing tech stocks on the TSX since a New York-based short-seller targeted it in September 2021. While the short report made some serious allegations about Lightspeed’s business practices, leading to a massive selloff, it failed to provide any credible evidence for these allegations. That’s one of the reasons why I find LSPD stock really cheap right now after witnessing a big selloff in recent months. Given that, long-term investors may consider adding Lightspeed stock to their portfolio as recent gains could just be the start of its expected spectacular rally.