Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Apple, Facebook, Square, and Other Growth Stocks Popped Today

By Joe Tenebruso - Mar 9, 2021 at 5:55PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bargain hunters came out in force.

What happened 

After a brutal decline, tech stocks rebounded on Tuesday. By the close of trading, shares of Apple (AAPL -1.92%), Facebook (FB -7.62%), and Square (SQ -9.02%) were up 4.1%, 4.1%, and 11.5%, respectively. Many other high-growth stocks rose even more.

So what 

The prices of many tech stocks soared in 2020, as investors sought out businesses that could continue to generate sales growth during the coronavirus crisis. Yet in recent weeks, as COVID-19 case counts have begun to decline, we've seen a rotation out of high-priced growth stocks and into less expensive companies.

Investors seemed to be assuming that many tech stocks would see their sales growth slow dramatically once the pandemic subsides. In turn, the Nasdaq Composite (^IXIC 0.00%) declined by about 10% since its highs in February. Many premium-priced growth stocks fell much more during this time.

A person is pointing to a stock chart with several upwardly sloping lines.

Many Nasdaq stocks rallied on Tuesday. Image source: Getty Images.

Judging by today's gains, however, some investors thought the sell-off was overdone. Bargain-hunters jumped at the chance to buy high-quality businesses like Apple, Facebook, and Square at more attractive prices, helping their prices begin to rebound on Tuesday.

Now what

Today's broad-based move in the Nasdaq suggests that the rally could just be getting started. But rather than day-to-day price swings, investors should focus more on the long-term fundamental growth drivers of the businesses in which they invest. And in this regard, the future appears bright for Square, Facebook, and Apple.

The growth of e-commerce and digital payments should continue to fuel Square's expansion for many years to come. Facebook, meanwhile, stands to benefit as advertising shifts increasingly to social media platforms. Finally, Apple remains a financial powerhouse -- one that's poised to reward its shareholders with a growing dividend stream, as rising sales of its iconic devices and popular services drive its earnings ever higher.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$140.36 (-1.92%) $-2.75
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$11,535.27 (0.00%) $0.00
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$181.28 (-7.62%) $-14.95
Block, Inc. Stock Quote
Block, Inc.
$75.88 (-9.02%) $-7.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.