The stock market finished the week strong on Friday, with gains in the major benchmark indexes. The technology industry generally led the way following a strong earnings report from the world's most valuable company. Investors were also pleased with the reception that the latest Republicans tax reform proposal has gotten, and while opposition has arisen as expected, proponents are optimistic that some form of tax cut could get through Congress.
Some stocks posted extremely large gains Friday, and Qualcomm (NASDAQ:QCOM), MercadoLibre (NASDAQ:MELI), with Arista Networks (NYSE:ANET) among the best performers. Below, we'll look more closely at what propelled these companies' stocks higher.
Qualcomm jumps on buyout rumors
Qualcomm soared 12% after reports surfaced that the chipmaker could be the target of an acquisition bid. Bloomberg reported that Broadcom (NASDAQ:AVGO) was considering making an offer to buy out Qualcomm, with possible terms involving a combination of cash and stock worth about $70 per share. That would be a more than 25% premium on the price Qualcomm traded at when the day began, and even after today's jump, a bid at that level would offer a double-digit-percentage return. Qualcomm's share price fell recently on fears that its modems might lose their spot in future iPhone models, which could give an acquirer a shot at picking up the tech giant at a bargain price.
MercadoLibre heads north
MercadoLibre jumped 15% following the Thursday night release of its third-quarter financial report. The Latin American e-commerce giant reported sales gains of more than 60%, with strong performance from its core marketplace, its MercadoPago electronic payments division, and its MercadoEnvios shipping service. User counts have risen throughout MercadoLibre's coverage area, with particularly good growth figures coming from the key Brazil and Mexico markets. Some still fear that competitors from the north might seek to cash in on Latin America's promise, but MercadoLibre's first-mover advantage will be hard for any new entrant to overcome.
Arista climbs toward the clouds
Finally, Arista Networks finished higher by 11%. The maker of open-source cloud and data center applications reported a sales increase of more than half from the year-ago quarter, and adjusted net income doubled from its level 12 months ago. A combination of strong recurring revenue growth and smart cost containment helped to drive Arista's extraordinary performance during the quarter, and the tech company's efforts are making it easier for customers to handle their information technology infrastructure regardless of how many different networks they have or which company is handling service obligations. As long as business keep shifting more of their computing needs into the cloud, Arista will have opportunities to keep growing.
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Arista Networks and MercadoLibre. The Motley Fool owns shares of Qualcomm. The Motley Fool recommends Broadcom Ltd. The Motley Fool has a disclosure policy.