The stock market moved lower on Wednesday afternoon, and the Nasdaq Composite (^IXIC 1.50%) took the biggest hit. The Nasdaq was down more than half a percent as of 10:45 a.m. EDT today, after it set new records on Tuesday and moved higher earlier in Wednesday's trading session.
Investors appear to be uncertain about the direction of the global economy, inflation in the U.S., and the longevity of the bull market that began more than a year ago. Yet those concerns aren't hurting shares of Newegg Commerce (NEGG 5.14%) and SMART Global Holdings (SGH 4.76%), both of which soared on Wednesday morning. Below, we'll see what has investors so excited about these two stocks.
Newegg offers computers on demand
Shares of Newegg Commerce jumped as much as 130% on Wednesday morning. That added to gains earlier in the week that have resulted in Newegg's stock more than tripling.
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Newegg announced that it would allow customers to design their own computers using its PC Builder online tool. Essentially, users can build their computers to order, and Newegg's in-house computer assembly service will put together and deliver fully assembled computers in a manner that the company claims is significantly faster than similar offerings from competitors.
The move comes less than two months after Newegg came public through a merger with Lianluo Smart Limited. Immediately after the merger, the newly combined company disposed of Lianluo's former business. Essentially, this allowed Newegg to go public without doing a formal IPO or working with a special purpose acquisition company, instead taking an existing publicly traded company with active operations.
The move was reminiscent of big swings in stocks targeted by short-sellers. According to Yahoo! Finance, Newegg doesn't have substantial short interest, but it's possible that the big move higher will prompt investors who think the computer maker has come too far too fast to start looking at short-selling as a possibility.
Looking SMART
Elsewhere, shares of SMART Global Holdings were up more than 13%. The technology company reported fiscal third-quarter results that pleased shareholders.
SMART's numbers were solid. Revenue jumped 56% from year-ago levels. Adjusted net income more than doubled year over year, and adjusted earnings of $1.39 per share were significantly better than most of those following the stock had expected.
This quarter marked the first that included the LED business of Cree, which SMART bought in March. SMART enjoyed continued strength in its memory solutions and intelligent platform solutions business segments, taking full advantage of favorable conditions in the industry.
SMART also sees growth continuing. Guidance for fiscal fourth-quarter sales of $440 million to $480 million and adjusted EPS of $1.45 to $1.75 were promising. The company's balanced end-market exposure among mobile and PC manufacturers, network and telecom companies, advanced lighting, and various other applications for industrial and defense customers gives it valuable diversification that should serve SMART well no matter the economic environment.