Tech Stocks Are Flying high But Some Argue Rally Won’t Last

Jun 20, 2023 thejournalbiz

Big tech companies, especially those who investors think are at the forefront or artificial intelligence have raced past the broader stock market this year

Investors can’t agree on whether the tech-stock rally looks like the prelude to an eventual bust—like that of the dot-com era—or the start of a more durable rally.

Tweet on big tech stock surge

Tech Stocks Are Flying high
Big tech companies, (the likes of @tesla @nvidia remain at the forefront, as artificial intelligence stocks have raced past the broader stock market this year, via @factset #TechNews #tesla #nvidia #AMD pic.twitter.com/50igSyHYex

— The_Journalbiz (@the_journalbiz) June 20, 2023

Factset chart

Hype around artificial intelligence has helped drive shares of technology companies to records this year. The rally has only intensified heading into the end of the quarter.

The Nasdaq Composite is coming off its eighth consecutive weekly gain, its longest streak since a 10-week run through March 2019.

Individual investors have been snapping up shares of technology-focused companies, with data from Vanda Research showing the group poured more money into Tesla than any other stock last week.

Options bets have exploded. The most popular contracts traded Friday were bullish bets on Tesla, Nvidia, Advanced Micro Devices, Apple and Meta Platforms, according to data from Trade Alert.

Investors and analysts who believe the rally has more room to run say that software developers, chip makers and other companies investing money in artificial intelligence have the potential to be at the forefront of a technology that could transform society in the coming years.

Others are more skeptical. They say previous boom-and-bust cycles have taught them that it is more difficult than it might seem to pick out the handful of companies that could ultimately dominate an industry over the long run.