Shares of cloud computing specialist Fastly (NYSE:FSLY) jumped on Monday, rising as much as 12.7%. By the time the market closed, the stock was up 11%.
The gain comes despite the fact there was no company-specific news on Monday. The move highlights a continuing trend of significant volatility for the tech stock since its initial public offering earlier this year.
Fastly stock's sharp gain on Monday could -- at least in part -- simply represent a rebound from a sharp decline on Friday. Shares were slammed on Friday amid a broader-market decline that hit high-growth stocks particularly hard.
But 10%-plus one-day rises and declines are not out of the norm for this stock. One prominent argument explaining the stock's recent volatility is that an investment firm's aggressive purchases of Fastly stock following its IPO have reduced float significantly, leading to more volatile trading.
Investors shouldn't give too much weight to near-term swings in the prices of growth stocks, particularly when they come at times when there is no company news. Instead, investors should remain focused on the underlying fundamentals of the stocks they own.