Tech stocks will start rallying again soon thanks to the AI 'tidal wave', Wedbush says
Tech stocks are expected to continue their rally as a surge in spending on AI is anticipated to ease concerns about interest-rate hikes by the Federal Reserve.
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Posted 8/29/2023, 9:19:00 AM
businessinsider.com
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Tech stocks rebounded on Monday, with the Nasdaq Composite climbing 1.6% and the S&P 500 adding 0.7% as bargain hunters took advantage of discounted prices, despite the 10-year Treasury yield reaching its highest level since 2007. Palo Alto Networks saw a significant surge after reporting higher-than-expected earnings and revenue, indicating strong demand for its artificial intelligence security operations platform.
U.S. stock index futures rise as Treasury yields decline, with tech stocks leading the rally ahead of earnings reports and Federal Reserve Chair Jerome Powell's upcoming speech.
A stock market rally is likely to occur in the near future, as recent data indicates that a bounce is expected after a period of selling pressure, with several sectors and markets reaching oversold levels and trading below their normal risk ranges. Additionally, analysis suggests that sectors such as Utilities, Consumer Staples, Real Estate, Financials, and Bonds, which have been underperforming, could provide upside potential in 2024 if there is a decline in interest rates driven by the Federal Reserve.
Despite recent market gains, investors are concerned that the current rally may be the last hurrah before an economic contraction, especially after the Federal Reserve indicated that it could hike interest rates twice more this year.
U.S. equity markets rallied as tech stocks gained and Netflix shares rose on strong subscriber growth, while Foot Locker and oil stocks struggled; U.S. Treasury yields and the dollar fell, while cryptocurrency prices rebounded.
The stock market's recovery in 2023, driven by technology stocks and the growing interest in artificial intelligence (AI), suggests that a new bull market may be underway, making it a good time to consider buying AI stocks like Advanced Micro Devices and Palo Alto Networks.
Tech stocks may face challenges in the second half of the year despite recent inflows, as central bank liquidity decreases and investors shift from equities to bonds.
Investors expecting a continued surge in technology stocks due to enthusiasm over artificial intelligence may face trouble as central banks tighten monetary policy, according to Bank of America strategists. The correlation between central bank liquidity and tech stocks is a cause for concern, as central bank balance sheets have shrunk while the Nasdaq continues to climb, indicating potential risks ahead.
Tech shares boosted U.S. stock indexes despite higher yields on Treasurys, with investors scaling back on bets for interest-rate cuts due to the strong U.S. economy.
Tech stocks led a rally in the stock market, with the Nasdaq Composite gaining 1.6% and the S&P 500 ending a four-day losing streak, despite the rise in Treasury yields; investors will be looking for clues about the US consumer spending and the economy as retailers' earnings reports are expected, and Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium is anticipated for indications on interest rates.
Tech stocks are exhibiting sell signals similar to previous market turning points, with valuations reaching unsustainable levels, a yield curve inversion indicating trouble ahead, and government funding and inflationary expectations creating economic challenges for long-duration assets.
Stocks rally as job openings decline in July, bonds rally on softening job market and odds of interest rate pause, court rules SEC needs more reasoning to block Grayscale's Bitcoin ETF, and other market movements.
Tech stocks, including Consensus Cloud Solutions and Pegasystems, are predicted to rally into the year-end and benefit from the AI-driven growth of the tech industry, according to Wedbush analyst Daniel Ives.
Wall Street's rally in stocks is expected to pause as investors await new data on jobs and GDP to determine whether the US economy has been impacted by Federal Reserve tightening.
Stocks are expected to rally next month, with the S&P 500 potentially reaching its previous highs, according to Fundstrat's Tom Lee, who cited reasons such as a cooling economy, no further interest rate hikes from the Fed, overly bearish sentiment in August, and historically strong performance in September.
Technology stocks appear to be defying the impact of higher interest rates and are continuing to perform strongly.
Summary: The stock market shows signs of a rally, with major indexes surpassing the 50-day line and Treasury yields decreasing, growth stocks are leading, and software companies like Salesforce, MongoDB, and CrowdStrike reporting positive earnings; meanwhile, Amazon and Shopify announce a deeper partnership, and Tesla unveils an upgraded Model 3 while also lowering prices. Additionally, a near-perfect jobs report and tamed inflation data suggest that the Fed may not continue with rate hikes.
Artificial intelligence (AI) stocks have experienced a recent pullback, creating buying opportunities for companies such as Taiwan Semiconductor and UiPath, which are poised for growth due to their involvement in AI technology and products.
The stock market sinks as a tech selloff occurs due to investors' fear of more Fed rate hikes, with Apple, Tesla, and Nvidia all experiencing significant declines.
Artificial intelligence is a revolutionary technology, but there are concerns that it is a bubble waiting to burst, as evidenced by the soaring stock price of Nvidia.
Artificial intelligence stocks, including C3.ai, Microsoft, Snap, and AMD, have experienced a shift in market sentiment as investors focus on the fundamentals and question whether the AI rally has reached its peak.
The rally in technology stocks in 2023 may be in trouble, signaling a potential downturn for the sector.
U.S. stock investors are closely watching next week's inflation data, as it could determine the future of the current equity rally, which has been fluctuating recently due to concerns over the Federal Reserve's interest rate hikes and inflationary pressures.
Analysts believe that Microsoft stock will continue to rise due to several catalysts, including the artificial-intelligence trend.
Tech stocks rallied, with Tesla surging more than 10% after an upgrade by Morgan Stanley, and Qualcomm jumping almost 4% on news of a continued supply agreement with Apple, leading to a 1.14% increase in the Nasdaq Composite.
Tech stocks retreated as Oracle posted slowing cloud sales, while the euro and pound weakened due to concerns over stagflation in Europe. Smurfit Kappa Group plunged after announcing a deal with WestRock Co., and investor confidence in Germany's economy improved. US inflation data and the European Central Bank's interest-rate decision are upcoming events.
AI stocks have emerged as the driving force behind the stock market rally, with nearly $500 billion added to the US market cap in 2023, led by companies like NVIDIA and Apple, and the growth prospects of AI continue to be driven by rising demand for software and semiconductor chips.
Goldman Sachs suggests that the recent surge in AI stocks does not indicate a bubble and that we are still in the early stages of an AI revolution, while others remain cautious about potential risks and advise a measured approach to investment in the AI sector.
Renowned investor Jeremy Grantham warns that the US tech bubble is on the verge of bursting due to inflated stock prices driven by AI hype, with a high chance of a US recession in the next 18 months. He advises caution in investing in US equities, real estate, and commodities, but sees compelling opportunities in climate-change stocks.
Stocks slip as investors await the Federal Reserve's policy meeting and the start of Instacart's IPO trading, with focus on interest rates and inflation.
Intel's stock is rising as an analyst suggests investors should pay attention to the company's efforts in artificial intelligence.
Big Tech stocks have been driving this year's market rally and have continued to outperform despite recent market volatility.
Tech stocks led a retreat on Wall Street as investors were concerned about the Federal Reserve's hawkish stance and its decision to keep interest rates steady, causing the S&P 500, Dow Jones, and Nasdaq Composite to decrease; Goldman Sachs has delayed its forecast for a Fed rate cut to the fourth quarter of 2024.
Big Tech stocks, driven by the promise of artificial intelligence, are experiencing a slowdown in their massive rally due to the Federal Reserve's indication of a restrictive monetary stance, causing declines in some tech giants' stock prices.
Tech stocks have been driving the market gains this year, particularly in the field of artificial intelligence (AI), with analysts like Daniel Ives predicting long-term growth and recommending AI-focused companies such as Palantir Technologies and C3.ai.