The stock market rebounded convincingly on Monday, with major benchmarks soaring more than 2% to make up all of Friday's losses and then some. News over the weekend that the U.S. and China would be willing to discuss their trade issues rather than directly imposing a series of escalating tariffs gave market participants hope that a full trade war won't happen. Investors instead refocused their attention on fundamentals, and with another earnings season right around the corner, the prospects for the first quarter after tax reform was passed without major one-time adjustments spurred optimism. Some stocks saw nice gains, and Microsoft (NASDAQ: MSFT), Dropbox (NASDAQ: DBX), and MongoDB (NASDAQ: MDB) were among the best performers on the day. Here's why they did so well.
Wall Street likes Microsoft
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Shares of Microsoft climbed almost 8% after getting positive comments from stock analysts at Morgan Stanley. The analyst company said that Microsoft has successfully made a transition back to higher-growth business thanks to its emphasis on cloud computing, and prospects for the company's Azure cloud platform are especially encouraging. Morgan Stanley went so far as to say that the company will hit a $1 trillion market capitalization in the foreseeable future and set an immediate price target of $130 per share. With the software giant having also announced an extension of its partnership with Adobe Systems in China, Microsoft seems to be pulling the right strategic levers toward growth.
Dropbox keeps climbing
Dropbox stock kept up its positive momentum from Friday, rising another 7% as the cloud-based storage company kept gaining investor support. Dropbox went public at $21 per share Friday morning and promptly gained more than 35% on its first day of trading, which was particularly impressive given the overall market's plunge that day. Over the weekend, most reports about the storage specialist seemed negative, but high-flying post-IPO stocks can sometimes maintain positive momentum a lot longer than less enthusiastic investors would believe possible. With some investors hoping for a pullback to let them buy into the stock more cheaply, Dropbox's current share-price moves are thwarting those wishes and could continue to do so.
MongoDB gets targeted
Finally, shares of MongoDB soared 16%. The database vendor was the subject of an article in Barron's over the weekend that identified it as one of several potential takeover targets in the cloud computing software space. Consolidation in technology has started to pick up as the sector's largest and most influential players seek to tap into the newest cutting-edge trends in tech, and MongoDB's non-relational database products could deal a competitive blow to well-established titans in the software subsector. With similarly young companies having already attracted takeover bids, some think it's just a matter of time before MongoDB gains the interest of an acquirer.
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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Adobe Systems and MongoDB. The Motley Fool has a disclosure policy.