Shares of Sea Limited (SE -7.49%) were climbing higher today, riding a huge buying wave in high-growth tech stocks as Treasury yields pulled back, encouraging a "risk-on" day as investors piled back into riskier assets like growth stocks.
The stock closed up 10.8% as the Nasdaq gained 3.7%.
There was no company-specific news out on Sea, but the digital gaming and e-commerce company has been highly volatile in recent weeks as tech stocks have pulled back. The Southeast Asian tech giant soared over the last year as all of its businesses, including mobile games, e-commerce, and digital payments, have gotten significant tailwinds from the pandemic. Revenue doubled in its most recent quarter, showing why the company has attracted so much investor attention over the last year.
Yesterday, Macquarie upgraded the stock from neutral to outperform and analyst Zhiwei Foo raised his price target on the stock from $124 to $280. Foo said the weakness related to rising yields was a good opportunity to add to the stock and was encouraged the company's recent guidance, which called for 38% in digital entertainment in bookings in 2021, and e-commerce sales to more than double.
Over the near term, Sea Limited shares are likely to be volatile along with the broader high-growth tech sector as investors respond to rising bond yields and the prospects of reopening as the pandemic fades. Over the longer term, Sea's strong guidance for 2021 should give investors confidence that this is more than just a pandemic story.