It has been a strong and positive first half of the year for the stock market, with all major indexes registering significant gains. Interestingly, both high-volatility and high-quality stocks have rallied in the first six months of the year. Something that seems quite peculiar, even though it is not unheard of. A deeper look at the markets reveals that Tech stocks were among the best-performing. As a matter of fact, things haven’t gone so well for tech stocks in the first half of the year since Apple was busy touting its Lisa desktop computer. Back then, IBM was the most valuable tech company at the time, and a certain market shaper by the name of Mark Zuckerberg wasn’t even born.
The Nasdaq Composite index would end June with gains of over 32%, while even the S&P 500 index was up 15%. The former mostly holds tech stocks that are usually considered highly volatile. Investors are more comfortable putting money in these kinds of stocks to capture higher earnings as the economy bounces back. Additionally, some tech stocks, such as Nvidia, Meta, Microsoft, Alphabet, and Apple, are part of the big tech and fall under high-quality stocks. Investors will put their money in these stocks to protect their portfolios when the economy is struggling. Given the past six months have seen the market turn a corner, it explains why tech stocks have performed so well.
Exciting Times For Trend Traders
Moving forward, investors are hoping the positive momentum will continue, and traders will be eager to capitalize on it. One strategy that works perfectly here is trading with the trend, which is a trader’s best friend. If you are wondering what is trend trading? The attached link will offer all the insights you need to capitalize on the upward trend tech stocks are experiencing.
Tech’s best half in 40 years comes after a miserable 2022 when Nasdaq lost over a third of its value. Tough times called for tough measures, and many top companies such as Alphabet, Meta, and Amazon conducted mass layoffs as they aimed to cut costs and boost efficiency. This paved the way for a rebound in earnings, creating a more realistic outlook for growth.
Tesla and Meta, both of which suffered significant losses last year, have more than doubled in value so far, and it’s the same case for many other tech stocks. Alphabet, which lost 39% of its value last year, is up 36%.
AI Buzz
Increased attention to Artificial intelligence (AI) through the rise of generative chatbots has also propelled tech stocks. For instance, Microsoft-backed OpenAI has become a household name thanks to ChatGPT, a generative chatbot that responds to text-based prompts in an intelligent and conversational manner. The program attracts over 100 million users every month, and this success is visible at Nvidia, whose chips are powering AI workloads at most companies utilizing the technology.
Nvidia stocks rose by 190% in the first half of 2023, pushing its market cap past the $1 trillion mark. Speaking to the press, Bryn Talkington, managing partner at Requisite Capital Management, believes tech will continue to dominate the market as the AI buzz continues.
Requisite Capital holds Nvidia shares and is enjoying positive returns on the company’s stocks. According to Talkington, the chip maker boasts a unique story, and its growth doesn’t resemble any other across the industry. The rise of AI means companies working on the technology have to spend heavily on Nvidia technology, which makes their stock quite attractive at this time.
“Nvidia not only owns the shovels and axes of this AI goldrush.” He goes on to add, “They are actually the only hardware store in town.”
On the other hand, Apple has seen a 50% rise in its shares so far, which has pushed its market cap to $3 trillion. Despite relying on iPhone sales for the bulk of its revenue, its latest success with virtual reality gear has renewed investors’ interest in its stocks.
All in all, traders have a real chance of capitalizing on this momentum by hopping on the trend.
