What Happened?
Shares of cloud communications provider Bandwidth (NASDAQ:BAND) jumped 6.5% in the afternoon session after B. Riley Securities initiated coverage on the stock with a 'Buy' rating and a $20 price target.
The firm highlighted Bandwidth's strategic position to gain from the growth of AI voice applications. B. Riley noted that Bandwidth is the only major cloud-based communications platform provider to own its own nationwide all-IP network. This unique setup gave it an advantage in providing high-quality network services as the adoption of AI voice was expected to expand rapidly in the coming years. The $20 price target represented a significant potential upside from its previous trading price.
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What Is The Market Telling Us
Bandwidth’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 2.7% on the news that President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks. The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
Bandwidth is up 2.5% since the beginning of the year, but at $14.58 per share, it is still trading 25.7% below its 52-week high of $19.61 from February 2025. Investors who bought $1,000 worth of Bandwidth’s shares 5 years ago would now be looking at an investment worth $87.28.
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