Tech stocks have propelled the Nasdaq 100 to reach fresh 14-month highs, marking a weeklong winning streak for the tech-heavy index.
Investor enthusiasm for technology stocks showed no sign of slowing down this week amid the growing frenzy around artificial intelligence. Leading the charge are tech giants Microsoft, Apple, Broadcom, and NVIDIA, collectively accounting for 34.6% of the index and all trading at record highs.
While Meta and Alphabet, comprising 11.8% of the Nasdaq 100, have yet to reach their 2021 record levels due to an advertising market recovery still in progress, both companies are making strides in the right direction. Meta, the social media giant, is currently at a 16-month high, while Alphabet, the parent company of Google, is not far from its recent 14-month highs.
Tesla, with a 4.2% weighting in the index, has been enjoying an impressive winning streak, setting new records for 13 consecutive sessions and reaching eight-month highs. The electric carmaker’s rally was fueled by Tesla's success in convincing Ford and General Motors to adopt its charging network and utilize its Supercharger network, which added a staggering $240 billion to Tesla's market capitalization in a mere two weeks. Although the upward momentum has slowed, Tesla shares have swiftly rebounded.
Other significant stocks in the index have also been driving higher. Software giant Adobe reached a 16-month high following positive market reception and investor excitement about its artificial intelligence prospects, driven by the recent launch of new products. Intel, at 10-month highs, is considering an investment in the highly anticipated IPO of semiconductor giant Arm. Netflix, still recovering from substantial losses incurred last year, has reached 16-month highs due to hopes that its new ad-supported tier and crackdown on password sharing will revive growth in 2023.
That said, with many of the stocks reaching fresh highs, some are now in overbought territory, according to the Relative Strength Index (RSI). The Nasdaq 100 as a whole is also overbought, with Tesla, Netflix, Adobe, and Broadcom topping the list. How long can tech's lofty valuations continue?
For now, here’s a look at tech company headlines from the week.