This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Shares of Facebook (NASDAQ: FB) jumped 8.2% to a new closing high of $303.91 on Wednesday, after analysts helped to focus investors' attention on the digital ad titan's massive growth opportunity in e-commerce.
So what
On Tuesday, UBS analyst Eric Sheridan reiterated his buy rating on Facebook's stock and boosted his price forecast from $242 to $330. Even after today's move, Sheridan's new target price represents potential gains for investors of roughly 9%.
Sheridan believes Facebook's recent push into e-commerce will be a significant source of additional growth for the social media leader. In May, Facebook partnered with Shopify and other e-commerce companies to launch Facebook Shops, a new online shopping platform. And yesterday, BigCommerce said it's teaming up with Facebook to launch a new feature on Instagram that would allow users to purchase products without leaving the popular photo-sharing app. In turn, Sheridan expects Facebook to become a powerful force in social commerce.
Now what
Facebook is already benefiting from the rise of e-commerce, as many online retailers spend heavily to promote their wares on its social media networks. But Facebook is taking steps to make it easier to make purchases directly from its social media sites, and, in the process, claim a larger share of the online retail industry's profits.
Judging by the stock's recent gains, investors applaud Facebook's e-commerce initiatives.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
