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Why NVIDIA, XPO Logistics, and Infinera Jumped Today

Dan Caplinger, The Motley Fool

Monday was an extremely strong day for the stock market, as major indexes finished well above where they started the session. Favorable economic data on retail sales renewed confidence that the U.S. economy continues to do well despite headwinds elsewhere around the world, and investors were pleased to see the U.S. and China discuss their respective currencies as part of their broader trade talks. Some benchmarks rose as much as 2%, but certain individual stocks saw even larger gains. NVIDIA (NASDAQ: NVDA), XPO Logistics (NYSE: XPO), and Infinera (NASDAQ: INFN) were among the top performers. Here's why they did so well.

NVIDIA makes a purchase

Shares of NVIDIA rose 7% after the chip giant announced a major acquisition. NVIDIA said it would spend $6.9 billion in cash to purchase Mellanox Technologies (NASDAQ: MLNX), giving Mellanox shareholders $125 in cash for every share they own. NVIDIA founder and CEO Jensen Huang commented, "We're excited to unite NVIDIA's accelerated computing platform with Mellanox's world-renowned accelerated networking platform under one roof to create next-generation data center-scale computing solutions." Mellanox shares were also higher by 8%, suggesting that investors see positives for both sides from the combination.

CD drive with top taken off to reveal chip board.

Image source: NVIDIA.

XPO gets an invitation

XPO Logistics saw its stock climb 8% following an announcement that the logistics company's shares will join a well-known index. S&P Dow Jones Indices announced late Friday that the company would join the S&P MidCap 400 index, as the index provider downgraded some shrinking companies to make space for XPO. For its part, XPO has struggled lately, as a key customer has looked at alternatives in getting its deliveries made. Yet even with that headwind, XPO is well-positioned within a growing industry, and favorable trends like rising volumes of e-commerce-related shipments should bode well for the delivery specialist's long-term prospects.

Infinera enjoys an upgrade

Finally, shares of Infinera picked up more than 9%. The company received favorable comments from analysts at MKM Partners, who upgraded their rating on the stock from neutral to buy. MKM also set a $6 price target, arguing that Infinera has a solid backlog of orders that includes some key new customers. Moreover, with a healthy pipeline toward getting more business, the fiber-optic specialist seems to be moving in the right direction. With signs that customers are finally starting to invest in IT infrastructure, Infinera stands to benefit greatly as its clients seek the best technology available.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool recommends Infinera and XPO Logistics. The Motley Fool has a disclosure policy.