ASX 200 tumbles but the Afterpay (ASX:APT) share price is green?

Most sectors are in the red on Friday. So why is the Afterpay share price outperforming?

Young boy in business suit punches the air as he finishes ahead of another boy in a box car race.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) is selling off on Friday, down 0.5% to 7,421 at the time of writing. In morning trade, it dipped as low as 7,382 points.

Amid the red, the S&P/ASX Information Technology (INDEXASX: XIJ) index stands tall, up 1.43%. Its performance is headlined by none other than the Afterpay Ltd (ASX: APT) share price.

At the time of writing, shares in the ASX's largest tech stock are up 2.9% to $127.12.

How come the Afterpay share price is shooting green on Friday?

Nasdaq finishes mixed overnight session in positive territory

The ASX 200 might be influenced by the mixed overnight performance of Wall Street.

The Dow Jones Industrial Average and S&P 500 both fell 0.18% and 0.15% respectively, while the tech-heavy Nasdaq rose 0.13%.

The Nasdaq managed to stay in positive territory, supported by the likes of Amazon.com, Inc (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), Netflix Inc (NASDAQ: NFLX) and Tesla Inc (NASDAQ: TSLA) all eking out small gains of less than 1%.

Afterpay's US-listed rival is surging

Perhaps more relevant for the Afterpay share price was the overnight performance of Affirm Holdings Inc (NASDAQ: AFRM).

Affirm shares rallied 7.13% overnight and have surged more than 75% since 27 August.

On 9 September, Affirm released its fourth-quarter results. Its revenue jumped 70.7% year-on-year to US$261.8 million vs. consensus expectations of US$225 million, according to CNBC.

In addition, the company gave encouraging guidance for the current quarter. It expects revenue to be between US$240 million and US$250 million.

This could be a positive takeaway for the Afterpay share price, given Affirm is the largest BNPL provider in the United States.

Square share price lifts overnight

The Square Inc (NASDAQ: SQ) share price also rallied overnight, up 2.53% to US$255.09.

The Afterpay share price has largely been tracking the performance of Square ever since the $39 billion takeover offer on 2 August.

The scheme implementation deed will see Afterpay shareholders receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay share they own on the record date.

After Square's overnight performance, this values the Afterpay share price at approximately $122.57 at today's exchange rates. That's up from yesterday's $119.58.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Affirm Holdings, Inc., Amazon, Microsoft, Netflix, Square, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Man holding a calculator with Australian dollar notes, symbolising dividends.
Technology Shares

$10,000 invested in DroneShield shares 5 years ago is now worth…

You might be laughing all the way to the bank if you had done this.

Read more »

Happy woman working on a laptop.
Technology Shares

Up 60% since April, why this $40 billion ASX 200 tech stock remains a 'compelling buy' today

A leading expert believes this $40 billion ASX 200 tech stock has a lengthy growth runway ahead of it yet.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
Technology Shares

Up 25% since April, is it too late to buy Xero shares today?

A leading expert gives his verdict on the growth outlook for Xero shares.

Read more »

Man looking at digital holograms of graphs, charts, and data.
Technology Shares

2 amazing ASX tech shares I wish I'd bought last year

These tech companies are among the world’s best companies.

Read more »

A man in a business suit and tie places three wooden blocks with the numbers 1, 2, and 3 on them on top of each other.
Broker Notes

3 reasons to buy this booming ASX All Ords tech stock today

A leading broker forecasts more gains to come from this surging ASX All Ords tech stock.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
AI Stocks

Why Macquarie forecasts a big rebound for these 2 quality ASX All Ords tech stocks

Macquarie expects a big rebound is coming for these AI linked, ASX All Ords tech stocks.

Read more »