Shares of Megaport Ltd (ASX:MP1) surged 5.01% in intraday trading, continuing its impressive momentum from the first quarter of 2025. The network as a service operator has defied the broader tech sector selloff, showcasing robust financial performance and raising its full-year guidance.

Megaport's strong rally can be attributed to its stellar half-year results, which revealed an 18% increase in annualised recurring revenue (ARR) to $226.6 million and a 12% lift in gross profit to $74.7 million. The company's decision to upgrade its guidance for FY 2025 has further bolstered investor confidence, contributing to the stock's upward trajectory.

Market analysts suggest that Megaport's outperformance may have triggered a short squeeze, as short sellers rushed to cover their positions in light of the company's positive outlook. This technical factor, combined with the strong fundamental performance, has propelled Megaport to be one of the best-performing stocks in the ASX 200 index, with a remarkable 31% gain in the first quarter of 2025.