After a November where Dow 30,000 got all the attention and the Nasdaq Composite mostly lagged relative to the S&P 500 and Dow as investors ate up value stocks, the tech heavy benchmark has come back en vogue this month…in a big way.
Through Dec. 8, the Nasdaq Composite (^IXIC) has tacked on nearly 3% compared to more modest gains for the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) per Yahoo Finance Premium data. On Monday, the Nasdaq hit its third straight record high in as many days — it has set an all-time high in four of the past five sessions. Gains have been powered by a who’s who of high-beta Nasdaq names such as Tesla (TSLA) (up 7% month to date) and Netflix (NFLX) (up 2.5% month to date).
Yahoo Finance chatted up several strategists on Wall Street to get their take on the strong move in the Nasdaq. Here’s how they boiled down the bullish action.
Favorable semiconductor news
Semiconductor giant Micron’s (MU) upbeat guidance last week for its most recent quarter was a buy signal on tech stocks, Sevens Report Research founder Tom Essaye says.
“Semiconductors have been on fire and not just from momentum — it’s been good earnings/guidance too from Micron and others,” Essaye explained.
Micron raised its sales guidance by about $700 million and took up the low end of its earnings guidance by 29 cents, suggesting demand for computing gear remains solid despite a tick-down in global economic growth due to the resurgent COVID-19 virus.
Yahoo Finance heard a similar bullish tone on computer demand from a key Intel (INTC) executive on Tuesday as well.
Demand in PCs has remained strong,” Intel executive vice president and client computing group president Gregory Bryan told Yahoo Finance Live.
COVID-19 flares back up
Value stocks were in favor for much of November as investors drew some hope from COVID-19 infection numbers. But with COVID-19 surging again in most parts of the world, investors have rotated back into big cap tech stocks that are somewhat immune to the pandemic and could still put up strong growth in 2021.