The stock market went through some turbulence on Tuesday, and the Nasdaq Composite (NASDAQINDEX:^IXIC) found itself giving up some of its recent gains. After starting the day up strongly, the Nasdaq was down about 0.1% shortly before 1 p.m. EST.
Nasdaq investors are hoping that 2021 will be able to continue the strong gains that 2020 produced. In some cases, the stocks that proved to be the best performers in 2020 were surprising. Yet many believe that the same factors that pushed a couple of key stocks higher last year are likely to persist well into the new year, and that's why their stock prices are rising again on Tuesday. Below, we'll look more closely at what's sending shares of Etsy (NASDAQ:ETSY) and Baidu (NASDAQ:BIDU) upward today.
Etsy's stock quadrupled in 2020, becoming one of the biggest winners in the market and qualifying it to join the prestigious Nasdaq-100 Index. Etsy's success stemmed from the arts and crafts-based e-commerce platform provider's ability to help homebound artists and crafters squeeze out some income from their work, even in the middle of the COVID-19 pandemic.
Today, Etsy is up another 13%, building on gains from Monday. Yesterday's performance stemmed from a positive call from stock analysts at Jefferies, who repeated their buy rating on the company and raised their price target on Etsy's stock to $205 per share. That was up by $37 per share from their previous guidance.
Etsy reportedly saw extremely good levels of business during the holiday season, with website traffic almost doubling. That's consistent with the lightning-fast growth rate in sales that Etsy reported in the first three quarters of last year.
The big question is whether Etsy will continue to grow once the COVID-19 pandemic comes under control. That's uncertain, but Etsy has burst into the mainstream, and shoppers won't forget about the website in the near future. As long as the sellers who use Etsy's platform keep coming up with innovative wares that appeal to customers, then Etsy should continue to profit.
Do you buy Baidu?
Baidu shares were up 9% on Tuesday afternoon. That move follows gains of more than 70% in 2020, as the Chinese search engine giant rebounded from a tough couple of years.
The latest gains stem from Baidu's decision to enter the extremely popular electric vehicle market. Many companies have stuck their toes into the EV space, including tech's biggest players as well as up-and-coming new enterprises with high hopes and entrepreneurial vision. China in particular has been a hotbed of activity in the EV industry, as companies like NIO (NYSE:NIO) seek to keep foreign competitors like Tesla (NASDAQ:TSLA) at bay.
But Baidu's rise of more than 70% in 2020 came largely from the recognition that the Chinese internet play had become undervalued. Even as its U.S. counterparts in Big Tech rocketed to huge earnings multiples, Baidu's share price was quite reasonable. For a good part of the year, the stock remained stagnant even amid the boom in other tech stocks around the world. Only toward the end of the year did Baidu really start to come into its own.
Even after its big gains, Baidu still sports a valuation that isn't ridiculously rich. That gives investors hope that the stock could continue to rise well into 2021 and beyond.