What happened

Shares of Square (NYSE:SQ) and Twitter (NYSE:TWTR) jumped sharply on Wednesday. As of 2:55 p.m. EDT, the two stocks were up 12.3% and 9.8%, respectively.

The two stocks' higher prices come after Jack Dorsey, the CEO of both Twitter and Square, said he has pledged $1 billion to help fund global COVID-19 relief efforts. Shares of Square are likely higher because one analyst is praising the move as evidence of the company's unique culture. And since Dorsey is also CEO of Twitter, this is also an indirect compliment of his leadership at the social network.

An employee and customer interact with the two displays included with Square Register

Image source: Square.

So what

Dorsey's $1 billion commitment is no small sum, even in relative terms. It amounts to 28% of the entrepreneur's wealth. After the coronavirus pandemic is under control, Dorsey said he will shift his charity efforts to universal basic income and girls' health and education.

His giving will come from his Square stock instead of his equity in Twitter since he owns more Square stock. Dorsey plans to "pace the sales [of Square stock] over time," he explained on Twitter. 

Shares of Square and Twitter are likely up, in part, simply because many growth stocks are trading sharply higher on Wednesday as the market continues to rebound from a recent sell-off. But a JPMorgan analyst did notably cheer Dorsey's charitable efforts, saying that the move is in line with Square's culture of economic empowerment.

This culture is a unique differentiator for the company, said analyst Tien-Tsin Huang. He reiterated an overweight rating for the stock.

Separately, Bernstein analyst Mark Shmulik upgraded Twitter from an underperform rating to a market perform, noting that the stock's valuation is more reasonable after a recent sell-off. He gave the stock a $29 12-month price target.

Now what

While Dorsey's charitable efforts are unlikely to have a material impact on Square or Twitter's business, particularly in the near term, the entrepreneur believes that the impact this money has will "benefit both companies over the long term because it's helping the people we want to serve."