Why Twitter Stock Will Grow

When it comes to the world of tech stocks, there is generally quite a bit of debate. However, that debate intensifies when you start to talk about Twitter (TWTR). Investors who are bullish on the stock will argue why it will grow and the bearish will argue why it will fall. Personally, I happen to be on the bullish side of the equation; and I understand why Twitter bulls are so adamant that the stock will grow long term. So, today we'll take a look at the argument the bulls have, how Twitter has addressed the argument, and why I believe that we're going to see long term growth.

The Bulls Aren't Happy With New User Data

The argument started upon the release of the most recent earnings report in February. The report showed that Twitter was still struggling to bring in new users. Because new users generally equate to strong revenue growth, bullish investors say that without the new users issue under control, we can't expect to see gains. Which I should add is a fair assumption; but assumptions aren't always correct.

Why Twitter Stock Will Grow

What Facebook Has Done About New Users

One key piece of information released along with Twitter's earnings report was the fact that they plan to open the Firehose feedback up to Google. This means that Twitter will show up more in Google results; enticing people who aren't logged in and active to become active and those without accounts to sign up. All in all, I think that this is a great plan.

But That's Not the Only Reason Twitter Will Grow

The fact that the social network is tackling the new users issue is a great thing; however, it's not the only reason that I'm so bullish on the social network's stock. Here are a few other reasons…

From A Technical View Point

From a technical view point, Twitter looks great! If you don't believe me, go ahead and open up the company's stock chart in the 3 month frame. What you see there is solid growth; and not breakout and fall back down type growth either. Instead, it's all slow, steady movement toward the top!

TWITTER STOCK GRAPH

From A Fundamental View Point

We all know that the news moves the market; and if you're looking for good news about Twitter, it's not going to be hard to find. Here are some of the most recent stories in the major media revolving around the stock…

  • Jim Cramer Weighs In – In an interview with The Street, Jim Cramer recently weighed in on the stock calling it a buy to $60 and insinuating strong upward growth!
  • Larger Ad Testing – One of the reasons I'm so bullish on Twitter stock is the fact that they have proven that they are capable of increasing earnings from their current user base. In a move to do just that, the social network recently announced that it would be testing larger mobile ads; which should lead to higher click through rates and more revenue.
  • Periscope – Another thing that may help to attract new users and more revenue is Twitter's new app called Periscope. The app allows users to stream video through the social network. With the way consumers digest media evolving; this is an important step for the better.

Final Thoughts

While I can understand concerns over new users, I think that those who are concerned are only concerned because they haven't done enough research. By digging in to either technical or fundamental data, it's clear that Twitter stock is primed and ready for growth!

Disclosure: None.

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