What happened

Shares of Magnite (MGNI -3.30%), the supply-side ad tech specialist, soared last month as analysts lined up behind the growth stock, sending it even higher after a surge in November.

Though there was little news on the company, the analyst endorsements and excitement around the ad tech space were enough to help the stock rise 62% in December, according to S&P Global Market Intelligence.

As you can see from the chart below, the gains came entirely in the third week of the month.

MGNI Chart

MGNI data by YCharts.

So what

Magnite, which makes a platform that helps content publishers manage their advertising business, started to rally on Dec. 18, gaining 17% after Susquehanna initiated coverage with a positive rating and a price target of $30. That represented 50% upside at the time. Analyst Shyam Patil said Magnite was the top independent supply-side platform in ad tech, and said its opportunity in connected TV (CTV) was particularly strong. He also credited the company's supply relationships for putting it in the leadership position in its niche.

A woman looks it different digital TV screens on a glass panel.

Image source: Getty Images.

Three days later, Needham had similar praise for Magnite, driving the stock up another 12%. Analyst Laura Martin maintained her buy rating on Magnite and raised her price target from $18 to $30. Martin noted a number of tailwinds for the company, including a rebound in the macro economy, the expanding connected TV market, and strong fundamental momentum. The stock surged again on Dec. 23 after Martin called Magnite her top pick for 2021 on CNBC.

Now what

Magnite kicked off 2021 by falling 10% on its first trading day of the year, a sign it may have been overbought in its run-up last month. Still, it's clear why investors are excited about Magnite: The opportunity in connected TV, defined as ad-driven streaming TV, is huge. The company saw 51% growth in CTV revenue in its most recent quarter, with key verticals like tech and e-commerce up by triple digits.

While the stock may need some time to grow into its higher valuation, the long-term future still looks bright for Magnite.