Shares of Sea Limited (SE 0.70%) spiked 9.7% this week on seemingly no company-related news. Investors may be continuing their positive sentiment toward the digital entertainment, e-commerce, and financial services company after a strong quarterly performance earlier this year.
Sea Limited's stock has gained a staggering 38% in the first half of this year, with most of those gains coming after the company reported its first-quarter 2021 results on May 18. Sea Limited's revenue jumped nearly 148% from the year-ago quarter and gross profit skyrocketed 212%.
Investors were clearly happy with those results and began sending Sea Limited's stock higher. The company's share price gains this week could be an extension of investors' optimism for the stock.
Additionally, investors have generally been more interested in technology stocks recently, after a big sell-off in the sector earlier this year. After betting on tech stocks in 2020 some investors left the sector early in 2021 as some economies around the world started opening back up.
But investors have recently come back to technology stocks as the COVID-19 delta variant circulates and some areas of the economy still appear to be fragile. With Sea Limited's digital entertainment and e-commerce businesses poised to benefit when people spend more time at home, investors may be snatching up shares of the company as worries increase that the delta variant could slow down reopening efforts.
Investors should be optimistic about Sea Limited's prospects. The company is growing quickly and its core businesses, like e-commerce, are tapping into long-term growth opportunities. Investors should keep an eye on the company's upcoming second quarter to ensure that it continues to deliver.