What happened
The stock market was having a strong start to the day on Wednesday, with all three major indexes firmly in positive territory shortly after the opening bell. However, fintech giant Block (SQ +6.77%), formerly known as Square, was an outperformer, with shares rising by as much as 5% before retreating a bit.
So what
There isn't any company-specific news propelling Block higher today. The move is likely being fueled by a combination of two factors.
Image source: Getty Images.
First, the recent market turbulence has disproportionately affected high-growth tech stocks, and Block is certainly one of them. The most beaten-down stocks are also the ones rebounding the most on Wednesday, so much of the move can be attributed to general market momentum.
Second, the fintech just got a big vote of confidence from an analyst at BTIG, who kept their buy rating on the stock. Although the analyst's price target was lowered from $320 to $230, the new target still implies about 95% upside over Square's current price.
Now what
To be sure, it's wise to take any analyst opinions with a big grain of salt. Block is now about 60% below its 2021 high, so it's not a big surprise that analysts are seeing a buying opportunity.
The real test will come when Block reports its 2021 year-end results, which is scheduled to happen on Feb. 24 after the market closes. If the company's business momentum keeps driving revenue higher, the current price could indeed prove to be a buying opportunity for patient investors.
