In today’s market, Square Inc (NYSE:SQ) is an anomaly: a technology firm that’s performing very well. On a year-to-date basis, Square stock is up nearly 42%, a resounding triumph amid a sea of disappointment. In contrast, competitors in the payment apps industry, such as Paypal Holdings Inc (NASDAQ:PYPL) and Apple Inc. (NASDAQ:AAPL), are decidedly muted.
Naturally, investors wonder if such momentum can last. I’m cautiously optimistic that it will. Unlike Apple, which has multiple and disparate businesses, SQ stock is a substantially more focused investment. And while PayPal is the dominant player in the online payment app arena, Square has the edge in providing a comprehensive solution for small businesses.
Of course, I don’t want to discount the pain in the broader markets, which has negatively impacted Square stock. For instance, the entire tech sector softened from mid-March due to several pessimistic catalysts, most notably the Tesla Inc (NASDAQ:TSLA) and Uber driverless technology controversies. In Square’s case, shares are down nearly 15% since the March 20 close.
At the same time, investors pushed up SQ stock for a reason. In fact, every indicator existed to run away from the markets, even from solid names. That just didn’t happen for SQ, which tells me that the positives outweigh the negatives.
Importantly, it’s not speculative optimism after which Wall Street chases. Small business sentiment is one of the bright spots this year, with entrepreneurs expecting more revenues and growth opportunities. Also, they’re reporting less difficulty in obtaining financing.
Naturally, this rising trend is a big boost for Square stock. But I’m even more intrigued with the finer details.
Square Stock Deserves Its Winning Ways
As I mentioned previously, the biggest advantage to using Square is its comprehensive platform. For signing up, you get a free credit card reader, which makes in-person transactions a snap. Along with that, you receive inventory management programs, as well as other administrative applications. It’s easily the best choice if you run a traditional business.
While rival PayPal maintains the edge for online businesses, the reality is that older generations are more entrepreneurial.