Today, Digital Brands Group (NASDAQ:DBGI) is trending, in a big way. Shares of DBGI stock are up more than 50% at the time of writing on heavy volume.
Indeed, investors in this small-cap stock are being rewarded for their patience. Digital Brands made an absolutely massive announcement. And we’ll get to that in a minute. However, it appears some massive momentum in the e-commerce space is at least partly to do with today’s rise.
Growth stocks are once again back in focus for investors, with the broader tech sector seeing massive buying pressure. It appears investors are increasingly factoring in transitory inflation into their valuation models. Growth stocks are in, and the value rotation we were seeing for some time appears to be out.
For Digital Brands, a curated collection of luxury lifestyle and digital-first brands, this is a perfect storm. Today’s announcement only adds to the bullish sentiment in the market.
Let’s dive into what the company announced, and why DBGI stock is soaring today.
Announced Partnership with Amazing Boosting DBGI Stock
Today’s announcement centers on Digital Brands’ expansion onto the Amazon (NASDAQ:AMZN) platform this fall. The company plans to launch a select group of brands on the Amazon platform later this year. For investors in DBGI stock, this move appears to be reflect investor sentiment that this is a winning strategy.
The growth e-commerce has seen as a result of the pandemic has been absolutely impressive. Indeed, investors in DBGI stock largely have picked this small-cap player as a way of gaining leverage to this trend. However, the Amazon platform continues to be the No. 1 marketplace for consumers. So much so that Amazon has surpassed Walmart (NYSE:WMT) as the top apparel seller in the U.S., according to a recent report. The potential for Digital Brands to leverage Amazon’s marketplace for further growth is something investors seem to like.
As a company that derives a lot of value from its core brands, Digital Brands stands to benefit from the awareness this new channel provides. Indeed, investors intrigued by growth plays in the e-commerce sector are increasingly gravitating toward small-cap plays such as Digital Brands right now. Given this momentum and this key catalyst, it’s hard not to like DBGI stock right now.
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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
