These 2 Nasdaq stocks led the markets higher on Wednesday

Investors finally got the confidence boost they were hoping for, but it didn’t come from this side of the Atlantic. Instead, it was the Bank of England that decided to intervene in the bond market, offering to buy sovereign debt to stem the devaluation of the pound.

That sent a message to investors that central banks would at least act to avoid systemic threats to the global financial system, and that was enough to send Dow Jones Industrial Average (^ DJI 1.88%)And the Standard & Poor’s 500 (^ GSPC 1.97%)And the Nasdaq Composite (^ IXIC 0.00%) approximately 2%.

index

Change in daily percentage

Change daily points

daw

+ 1.88%

+549

Standard & Poor’s 500

+ 1.97%

+72

Nasdaq

+ 2.05%

+222

Data source: Yahoo! finance.

The Nasdaq Led the way up, had the best performance out there Biogenwhich announced a definitive study in its candidate treatment for Alzheimer’s disease.

However, two other Nasdaq stocks were instrumental in helping boost investor sentiment. Below, you’ll find out why Netflix (NFLX 9.29%) And the MercadoLibre (milli 7.52%) It rose on Wednesday, along with whether their gains are likely to hold in the long run.

Much ado about ad-supported Netflix

Netflix shares are up nearly 9% on Wednesday. The streaming video giant has won a vote of confidence from analysts at Atlantic Equities, who believe the introduction of a new ad-supported subscription category could be a game-changer for Netflix.

Atlantic has upgraded Netflix’s stock from neutral to overweight. It also boosted its share price target by more than a third to $283 a share. As customers threaten to leave the service because of its perceived high cost, analysts believe that enabling subscribers to pay less, in exchange for agreeing to see ads, may go beyond just allaying concerns about growing unrest.

In Atlantic’s view, Netflix could get a huge boost in revenue from advertising, with an estimated $6.7 billion in additional sales helping to increase average revenue per user to $26 per month. Given that Netflix’s non-ad-supported subscription plans cost less than that, the implication is that the video streaming service will have a huge incentive to get all of its viewers to take ads.

However, there are some Obstacles that Netflix will have to overcome. You may have to renegotiate revenue sharing licenses with content providers, some of which do not provide for the right to display ads. Moreover, preliminary estimates suggest that even the ad-supported category of Netflix will not be free, leaving low-priced alternatives for viewers to consider. However, given how down the stock is already, more gains for Netflix stock is possible if the company goes ahead with the plans everyone is talking about.

MercadoLibre climbs with Latin America

Meanwhile, MercadoLibre shares are up about 8%. The Latin American e-commerce giant has struggled with rising global economic tension, but signs of a potential solution have given investors more confidence in its long-term prospects.

Emerging markets such as Brazil are sensitive to the recent strength of the US dollar. Since many Latin American economies hold large amounts of sovereign debt tied to the dollar, low foreign exchange rates make it difficult to repay their loans. This, in turn, puts additional pressure on emerging economies, threatening to damage living standards and crippling consumer-facing companies such as MercadoLibre.

However, today’s BoE move indicates that central banks will intervene as necessary to prevent volatile markets from harming the global financial system. This bodes well for MercadoLibre, given its impressive growth in providing consumers across Latin America with the ability to shop, make payments, ship products, and do a host of other things online through its e-commerce platform.

MercadoLibre has a lot of potential in an installed space. This currently makes it more appealing than Netflix in some ways, but both stores have room to bounce back in the coming months.

Dan Caplinger He has positions at MercadoLibre. Motley Fool has positions at and recommends MercadoLibre and Netflix. Motley Fool recommends Biogen. Motley Fool has a profile Disclosure Policy.

Leave a Comment