Shares of supply-side digital advertising platform Magnite (MGNI -1.01%) jumped higher on Friday after a prominent analyst recommended buying the stock. Investors might be surprised that commentary such as this could cause such a big move -- Magnite stock was up 11% as of 10:50 a.m. ET today. But the analyst noted some big news in recent days that many investors might have overlooked.
Magnite is securing big deals
According to StreetInsider, Bank of America analyst Omar Dessouky just upgraded Magnite stock from a neutral rating to a buy. It's an under-the-radar advertising technology (adtech) stock, and many investors don't really follow the news with Magnite. So those who don't keep up are reading Dessouky's note this morning and learning about the big deals that the company just secured.
Last week, Netflix said that Magnite will be a key partner in its evolving programmatic ad strategy, and there aren't many potential deals bigger than this for a small adtech company.
Then this week, Magnite announced it had partnered with Shopsense AI, a company that makes streaming-video ads shoppable via a second screen so it doesn't interrupt the program.
Shopsense AI might not have name recognition, but its software is used by Paramount Global. So that's two big partnerships for Magnite in just the last two weeks. And it's partly why Dessouky feels comfortable recommending that his clients buy the stock.
Is this a turning point for Magnite?
Magnite recently reported financial results for the first quarter of 2024. Connected-TV revenue made up about 42% of its total and was growing at a nice clip of 18%. Deals with Netflix and Paramount could accelerate this, which would be a good thing for shareholders.
Magnite stock is down more than 50% over the last three years. But with important partners and ongoing growth in connected TV, perhaps that's about to change.
