What happened
Shares of sports betting company DraftKings (DKNG 0.09%) jumped as much as 10.2% in trading on Tuesday after some positive news came out about the stock. Shares were up 6.9% at 12:30 p.m. EST.
So what
The biggest news driving the stock was Goldman Sachs upgrading shares to a buy rating and putting a $65 price target on shares. Analyst Stephen Grambling thinks DraftKings' market-leading position will create a network effect and give the company lots of options for growth in the future.
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In an interview, Melonie Johnson, President of Borgata Hotel and Casino in New Jersey, also said that there has been a 174% increase in online gambling related to the company's property. That's another data point that shows just how quickly online gambling is growing.
Now what
The analyst upgrade is something that will often push a stock higher, but the pop may not last. What's more important to see is the growth in online gambling nationwide, and that trend doesn't seem to be slowing down. Not only are states like New Jersey growing revenue, but gambling is expanding to new states like Michigan and Pennsylvania with others in the pipeline. That's the real reason to be bullish about online betting in the future and that's what investors should focus on, rather than a Wall Street analyst's view of this growth stock.
