Capitalizing on the global growth of e-commerce, GigaCloud Technology Inc (NASDAQ: GCT) provides business-to-business e-commerce solutions catering to large parcel retailers across the world. Following its IPO to start trading on the NASDAQ, GCT stock climbed from its IPO PPS of $12.25 past $40 – leading investors to speculate that the stock could witness a run similar to HKD’s earlier this month. While the stock is volatile at the moment, GCT stock could be one of the Chinese tech stocks to watch next week for a potential continuation.
GCT Stock News
GCT’s main business is its disruptive e-commerce platform – GigaCloud B2B Marketplace – to allow manufacturers distribute their products globally and provide them with access to new markets across the world. Launched in 2019, this marketplace was initially focused on the global furniture market before expanding to include additional categories like home appliances and fitness equipment. In this way, GCT’s marketplace could be a leading e-commerce platform for its niche.
By using this marketplace, suppliers are able to diversify their sales channels through the marketplace’s features of product discovery, payments, and messaging portals. Meanwhile, resellers using this marketplace have access to these manufacturers’ products backed by GCT’s logistics system. In this way, GCT’s marketplace enables manufacturers to distribute their products worldwide while providing resellers with the resources and infrastructure to manage a global supply chain. In light of this, GCT could be one of the Chinese tech stocks with long-term potential since this marketplace could revolutionize e-commerce.
Additionally, GCT’s logistics system could allow the company to witness increased demand for its marketplace as many manufacturers are looking to expand their businesses worldwide. On that note, GCT operates 21 warehouses in 4 countries across North America, Europe, and Asia totalling more than 4 million square feet of storage space. At the same time, these warehouses cover 11 destination ports with more than 10 thousand containers annually. Moreover, GCT has an extensive shipping and trucking network which was formed through the company’s partnerships with major shipping, trucking and freight service providers. Based on this, GCT’s marketplace could be an attractive channel for manufacturers and resellers looking to expand their products’ reach across the world.
Looking to enhance its marketplace, GCT integrated an AI software with the marketplace to generate seller ratings and credit profiles through volume data. The AI also organizes incoming orders and rebalances inventory levels within GCT’s warehouses to optimize routing. Meanwhile, GCT leverages its AI to accumulate user and product data to develop analytical tools to allow sellers to manage their inventory and pricing more efficiently. As a result, this marketplace could attract more sellers looking to become more profitable. As this marketplace continues to grow, GCT stock could be one of the Chinese tech stocks worth investing in for the long-term.
As one of the fastest growing large parcel marketplaces, GCT’s marketplace has more than $438 million of gross merchandise value transacted for the 12 months ended March 31, 2022. GCT was able to achieve this significant growth since it sells its own inventory to third-party e-commerce websites like Amazon and Walmart in the US, Rakuten in Japan, and Wayfair in the UK. By selling its inventory through such major retailers, GCT is able to expand its market presence while reducing inventory and logistics risk for its sellers. Based on this, GCT is a profitable company – realizing $414 million in revenues and reporting a net income of $29 million in 2021. In light of these substantial numbers, GCT could be one of the most profitable Chinese tech stocks in the long-term as the company continues growing its marketplace.
With this in mind, GCT could be well-positioned for more growth in the future since the US large parcel market is underutilized by e-commerce at the moment. This is mainly the result of the supply chain issues rising from moving bulky items. With more manufacturers and resellers expected to adopt B2B e-commerce marketplaces, GCT could be on track to become a leader in this underserved market – allowing the company to witness significant growth in the future. On that note, the US B2B market is currently worth $14.8 trillion which could provide GCT with substantial revenues if it is able to attract additional manufacturers and resellers to its marketplace. With the company looking to disrupt this underserved market, GCT could be one of the Chinese tech stocks to hold for the long-term.
In the meantime, GCT is witnessing strong buying pressure sending the stock to new highs – with the stock breaking the $40 mark. This parabolic run is mainly due to the hype surrounding IPOs of China and Hong Kong based companies following the run of HKD to $2500. In light of this, many investors are holding GCT stock in anticipation of a similar run to materialize. While such a run is unlikely to occur, GCT could be a profitable long-term hold for many investors.
Media Sentiment
@BinDaddys believes GCT could have a similar run to HKD considering its low float.
@KingShard1 is excited about his gains from GCT even with its pullback.
Technical Analysis
GCT is currently trading at $49.55 and shows resistance at its high of 58.37. The stock also shows newly formed supports near 40.93, 26.27, and 20.18. With China and Hong Kong IPOs witnessing increased interest from investors thanks to HKD’s run past $2500, GCT soared from its IPO price of $12.25 to $58.37 in only two trading days. With this in mind, GCT appears to be losing some of its momentum due to investors taking profits near the stock’s high. This dip could be an opportunity for investors looking to realize gains from GCT’s volatility. However, GCT is extremely overvalued at the moment so investors should minimize their risk when entering a position in GCT.
With investors taking profits near GCT’s high, accumulation is witnessing a downtick and the MACD appears to be approaching a bearish crossover. Meanwhile, the RSI cooled off 82 to 65 indicating that the stock remains overbought. In light of this, bullish investors could wait for the RSI to regulate before starting a position in GCT in anticipation of the second leg of this run. GCT has an OS of 30.9 million and a low float near 2.9 million.
GCT Stock Forecast
With the company looking to disrupt the large parcel e-commerce market, GCT’s marketplace could enable the company to become a leader in this underserved market. Since this platform allows manufacturers and resellers to distribute their products globally more efficiently, GCT’s marketplace could witness an influx of new manufacturers and resellers looking to increase their profitability. With this in mind, GCT is already a profitable company as it was able to realize more than $414 million in revenues in 2021 which makes the company an attractive investment for long-term investors. In the short-term, GCT is benefiting from the hype surrounding China and Hong Kong based IPOs thanks to HKD’s parabolic run past $2500. With some investors bullish GCT could reach similar highs, GCT stock could be one of the Chinese tech stocks to keep an eye on next week.
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