What happened

Shares of Jumia Technologies (JMIA 8.83%) soared 183.4% in July, according to data from S&P Global Market Intelligence. Strong momentum for the tech sector and the online-retail industry in particular helped the African e-commerce stock post stellar gains last month. 

^SPX Chart

^SPX data by YCharts.

There doesn't appear to have been much in the way of business-specific news behind the shares' staggering rise. The e-commerce specialist announced implementation for Airtel Money as a digital payments option across its platform, but it's unclear to what extent this factored into Jumia's soaring valuation. The small-cap company's stock appears to have benefited from market momentum and investor enthusiasm for potentially explosive e-commerce plays amid torrid growth for the overall industry. 

An orange ascending bar chart.

Image source: Getty Images.

So what

Bullish sentiment on Jumia stock is increasing due to tailwinds created by the coronavirus pandemic. June saw the company announce that its online food ordering platform had seen sales climb at a 30% month-over-month rate since March, and its retail business and payment processing services could continue to enjoy heightened engagement amid shifting consumer behavior driven by COVID-19. Africa's e-commerce market is still relatively small, but it has a huge room for expansion in the coming decades, and this year's unprecedented conditions appear to be accelerating the industry's growth in the continent.

Now what

Jumia stock has continued to climb in August. The company's share price is up roughly 12% for the month so far. 

JMIA Chart

JMIA data by YCharts.

Even after the company's stellar gains this year, its stock is still up just 20% from its $14.50 initial public offering price last August. Room for growth in e-commerce and payment processing services in the African market suggests that Jumia could be a big winner, but it remains a high-risk investment.

Jumia Technologies has a market capitalization of roughly $1.3 billion and is valued at 7.4 times this year's expected sales. The company is scheduled to report second-quarter earnings before the market opens on Aug. 12.