What happened
Shares of MongoDB (MDB -0.86%), Splunk (SPLK), and Alteryx (AYX) all rose sharply on Tuesday. Each of these companies' stocks rose by double digits at one point before settling down slightly. As of the market close, they were up 16%, 14%, and 5%, respectively.
So what
It was another volatile day on Wall Street, but it was the good kind today. The S&P 500, Dow Jones Industrial Average, and Nasdaq all rose by more than 5%.
News broke that President Trump has proposed a $1 trillion stimulus plan to combat the economic effects of the coronavirus pandemic. The plan is still in development, but it is said to include payouts to Americans.
Image source: Getty Images.
That news caused dozens of growth stocks to rise strongly today. MongoDB, Splunk, and Altyerx -- which are all fast-growing software-as-a-service companies -- all outperformed the rally.
Now what
In anyone's guess whether or not an economic stimulus plan will be passed, but it is clear that politicians are thinking about ways to help Americans weather this storm.
MongoDB, Splunk, and Altyerx all sell their services to businesses, so it's unclear whether a stimulus plan would benefit them directly. The good news is that these companies appear to be growing just fine on their own anyway.
MongoDB just reported its fourth-quarter and full-year fiscal 2020 results after the market closed, and the numbers looked pretty good. Revenue surged 58% for the full year to $421.7 million, and management predicted that revenue in the year ahead would land between $510 million and $530 million. That represents growth of about 23% at the midpoint.
Splunk reported its full-year numbers a few weeks ago, and they also looked good. Revenue grew 31% in fiscal 2020 to $2.36 billion, and management expects it to grow about 10% in fiscal 2021 to about $2.6 billion.
Alteryx is producing the best numbers of the group. Last year its top line grew 65% to $418 million, and management guided for revenue to be in the range of $555 million to $565 million in the year ahead. That represents an increase of 33% to 35% year over year.
With uncertainty still in the air, it's likely that these growth stocks will continue to trade erratically based on the headlines of the day. Investors should keep their eyes trained on these companies' business results and do their best to ignore the day-to-day stock gyrations.
