Technology stocks on display on the Nasdaq have been a topic of interest for investors lately. After a miserable 2022, tech stocks are rewarding investors who saw the selloff as too extreme. The Nasdaq Composite gained 2% this week, closing out the tech index’s sixth straight weekly rally. It is the longest stretch since January 2020, before the Covid-19 pandemic hit the US.
Last week’s gains were boosted by Nvidia’s earnings report and a rise in optimism around demand for technologies that power AI workloads. Among the most valuable Nasdaq companies, Tesla led the way, up 11% for the week. Shares of the electric vehicle maker are now up 74% on the year after losing about two-thirds of their value in 2022.
Tesla and Nvidia helped push the Nasdaq up 27% in 2023, far outperforming the S&P 500 and Dow Jones Industrial Average. The index is still 18% below its all-time high after peaking at the end of 2021 and plunging 33% last year, its steepest drop since the financial crisis, on concerns about inflation and rising interest rates.
Danielle Shay, vice president of options at Simpler Trading, said in an interview on CNBC’s “The Exchange” on Friday that she was focusing on mega-cap tech and semiconductors. “AI trading has been absolutely phenomenal,” she said.
In cloud software technology corner some earnings reports still provide momentum. MongoDB jumped 33% for this week after reporting earnings and revenue that beat analyst estimates and raised its guidance for fiscal year ending January 31st, 2024.
CEO Dev Ittycheria said his company’s products are seeing increased usage as customers seek efficiencies and cut costs. “It’s clear that customers continue to look at their technology investments and must decide which technologies are must-haves and which are just nice to have,” he said.
However, cybersecurity vendor SentinelOne and software developer PagerDuty experienced the other side of the equation. SentinelOne plunged 35% for this week after the company cut its targeting and announced layoffs. Large customers have been using the technology less, and due to the “current macro environment, we expect these lower usage and consumption trends to persist.”
PagerDuty fell 14% this week. The technology provider that helps IT departments respond to incidents cut its forecast for the year “in anticipation of continued pressure” on small and midsize businesses.
The kernel, while tech stocks have yet to fully recover from a miserable 2022, they are rewarding investors who saw the selloff as too extreme. According to CNBC’s source, among the most valuable Nasdaq companies, Tesla led the way with a significant increase in shares. Despite uncertainties in some areas of cloud software technology such as cybersecurity vendors like SentinelOne and software developers like PagerDuty experiencing decreases in their stock value due to customer usage trends amidst current macro environments, mega-cap techs like Nvidia continue to perform well.