The Nasdaq has soared to record highs in recent weeks, significantly outpacing gains on both the S&P 500 and the Dow.
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
London (CNN Business)The Nasdaq has soared to record highs in recent weeks, significantly outpacing gains on both the S&P 500 and the Dow.
The big question on Wall Street: Has the tech-heavy index — driven by spectacular stock gains for Amazon(AMZN), Apple(AAPL) and Microsoft(MSFT) — shot up too high, too fast?
This week could provide some clues as tech earnings for the April-to-June period kick off. IBM(IBM) is due to report results on Monday, followed by Microsoft on Wednesday and Intel(INTC) on Thursday.
Daniel Ives of Wedbush Securities remains extremely bullish on tech stocks, noting the huge benefits of their exposure to cloud services as millions more people continue to work from home.
See here: Microsoft’s cloud services revenue skyrocketed 39% during the first three months of 2020, compared to the same period in 2019. CEO Satya Nadella pointed to “two years’ worth of digital transformation in two months.”
Read More
In a recent note to clients, Ives predicted that tech stocks could rally another 20% to 30% before peaking. But that will require another quarter of strong growth in a tough economic environment.
Investors are increasingly nervous about the meteoric rise in tech shares. According to a survey conducted by Bank of America this month, a record 74% of fund mangers said that tech stocks are a “crowded” trade, indicating they see the sector as overvalued and may start looking for opportunities elsewhere.
