Hold onto your hats, folks, because the tech industry has been on an absolute rollercoaster ride lately! While many investors were left feeling disillusioned by the industry’s bleak 2022, those who kept the faith and weathered the storm have been handsomely rewarded. Tech stocks are bouncing back in a big way, with the Nasdaq Composite gaining a whopping 2% this week alone – marking the sixth consecutive week of gains for the tech-heavy index. In fact, this is the longest stretch of gains the index has seen since before the Covid-19 pandemic hit the US in January 2020. The entire stock market got a boost on Friday after a strong jobs report for May and a debt ceiling bill passed through the Senate, allowing the US to avert default. While President Joe Biden still needs to sign the bill, hopes are high that this is a turning point for the tech industry.
So, who’s leading the charge in tech right now? Look no further than Tesla and Nvidia – two companies that have seen incredible growth in recent months. Tesla, in particular, has been on fire, with an 11% increase in just one week. That brings their total increase for the year up to a staggering 74%, after losing roughly two-thirds of its value in 2022. Nvidia, meanwhile, has surged an impressive 169% in 2023, helping to propel the Nasdaq up an impressive 27% for the year. That’s a far cry from its devastating 33% drop in the midst of the Covid crisis last year, which sent shockwaves through the stock market.
Of course, we can’t forget about those companies that are lagging behind. SentinelOne and PagerDuty had a particularly rough week, with SentinelOne experiencing a 35% plunge after the company lowered their guidance and announced layoffs. Meanwhile, PagerDuty dropped 14% after slashing their forecast for the year. While it’s always sad to see companies struggle, it’s clear that in the current macro environment, technology is an industry where fortunes can change on a dime.
Despite some bumps in the road, the outlook is bright for the tech industry. Danielle Shay, vice president of options at Simpler Trading, is particularly excited about the potential of mega-cap tech and semiconductors moving forward. Speaking to CNBC on Friday, she said, “The AI trade has been absolutely phenomenal.” And who are we to argue with a pro like her? One thing is for sure – investors will be keeping a close eye on the tech industry in the coming months, as the winds of change continue to blow through Wall Street.