{"id":23002,"date":"2023-05-27T12:32:34","date_gmt":"2023-05-27T12:32:34","guid":{"rendered":"http:\/\/107247371"},"modified":"2023-05-27T12:32:34","modified_gmt":"2023-05-27T12:32:34","slug":"the-tech-trade-is-back-driven-by-a-i-craze-and-prospect-of-a-less-aggressive-fed","status":"publish","type":"post","link":"https:\/\/wp.worldtechguide.net\/the-tech-trade-is-back-driven-by-a-i-craze-and-prospect-of-a-less-aggressive-fed\/","title":{"rendered":"The tech trade is back, driven by A.I. craze and prospect of a less aggressive Fed"},"content":{"rendered":"<p><span class=\"HighlightShare-hidden\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-106390082\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company&#8217;s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019.<\/p>\n<p>Patrick T. Fallon | Bloomberg | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Forget about the <span class=\"waslinkname\">debt ceiling<\/span>. Tech investors are in buy mode.<\/p>\n<p>The <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-2\"><span class=\"waslinkname\">Nasdaq<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> Composite closed out its fifth-straight weekly gain on Friday, jumping 2.5% in the past five days, and is now up 24% this year, far outpacing the other major U.S. indexes. The S&amp;P 500 is up 9.5% for the year and the Dow Jones Industrial Average is down slightly. <\/p>\n<div class=\"ExclusiveContentBucket-exclusiveContentBucket\"><span class=\"ExclusiveContentBucket-smallSpan\"><\/span><span class=\"ExclusiveContentBucket-border\"><\/span><\/p>\n<h2 class=\"ExclusiveContentBucket-exclusiveContentHeading\">related investing news<\/h2>\n<\/div>\n<p>Excitement surrounding chipmaker <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-3\"><span class=\"waslinkname\">Nvidia&#8217;s<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> blowout <span class=\"waslinkname\">earnings report<\/span> and its leadership position in artificial intelligence technology drove this week&#8217;s rally, but investors also snapped up shares of <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-5\"><span class=\"waslinkname\">Microsoft<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-6\"><span class=\"waslinkname\">Meta<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-7\"><span class=\"waslinkname\">Alphabet<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, each of which have their own AI story to tell.<\/p>\n<p>And with <span class=\"waslinkname\">optimism brewing<\/span> that lawmakers are close to a deal to raise the debt ceiling, and that the Federal Reserve <span class=\"waslinkname\">may be slowing<\/span> its pace of interest rate hikes, this year&#8217;s stock market is starting to look <span class=\"waslinkname\">less like 2022<\/span> and more like the tech-happy decade that preceded it.<\/p>\n<p>&#8220;Being concentrated in these mega-cap tech stocks has been where to be in this market,&#8221; said Victoria Greene, chief investment officer of G Squared Private Wealth, in an interview on CNBC&#8217;s &#8220;Worldwide Exchange&#8221; Friday morning. &#8220;You cannot deny the potential in AI, you cannot deny the earnings prowess that these companies have.&#8221;<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-107247121\">\n<div role=\"button\" id=\"Placeholder-ArticleBody-Video-107247121\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000300928\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/wp.worldtechguide.net\/wp-content\/uploads\/2023\/05\/the-tech-trade-is-back-driven-by-a-i-craze-and-prospect-of-a-less-aggressive-fed.jpg\" alt=\"Greene: The tech rally is likely to continue due to earnings power and the potential of AI\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>To start the year, the main theme in tech was <span class=\"waslinkname\">layoffs<\/span> and cost cuts. Many of the biggest companies in the industry, including Meta, Alphabet, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-12\"><span class=\"waslinkname\">Amazon<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and Microsoft, were eliminating thousands of jobs following a dismal 2022 for revenue growth and stock prices. In earnings reports, they emphasized efficiency and their ability to <span class=\"waslinkname\">&#8220;do more with less,&#8221;<\/span> a theme that resonates with the Wall Street crowd.<\/p>\n<p>But investors have shifted their focus to AI now that companies are showcasing real-world applications of the long-hyped technology. OpenAI has exploded after releasing the chatbot ChatGPT last year, and its biggest investor, Microsoft, is <span class=\"waslinkname\">embedding the core technology<\/span> in as many products as it can.<\/p>\n<p>Google, meanwhile, is touting its rival AI model at <span class=\"waslinkname\">every opportunity<\/span>, and Meta CEO <span class=\"waslinkname\">Mark Zuckerberg<\/span> would much rather <span class=\"waslinkname\">tell shareholders<\/span> about his company&#8217;s AI advancements than the company&#8217;s <span class=\"waslinkname\">money-bleeding<\/span> metaverse efforts.<\/p>\n<p>Enter Nvidia.<\/p>\n<p>The chipmaker, known best for its graphics processing units (GPUs) that power advanced video games, is riding the AI wave. The stock <span class=\"waslinkname\">soared 25% this week<\/span> to a record and lifted the company&#8217;s market cap to nearly $1 trillion after first-quarter earnings topped estimates.<\/p>\n<p>Nvidia shares are now up 167% this year, topping all companies in the S&amp;P 500. The next three top gainers in the index are also tech companies: Meta, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-20\"><span class=\"waslinkname\">Advanced Micro Devices<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-21\"><span class=\"waslinkname\">Salesforce<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed InlineImage-inlineInfographic\" id=\"ArticleBody-InlineImage-107247476\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div class=\"InlineImage-imagePlaceholder\">\n<div><button class=\"InlineImage-closeEnlargedImage\"><title>Zoom In Icon<\/title>Arrows pointing outwards<\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>The <span class=\"waslinkname\">story for Nvidia<\/span> is based on what&#8217;s coming, as its revenue in the latest quarter fell 13% from a year earlier because of a 38% drop in the gaming division. But the company&#8217;s sales forecast for the current quarter was roughly 50% higher than Wall Street estimates, and CEO Jensen Huang said Nvidia is seeing &#8220;surging demand&#8221; for its data center products.<\/p>\n<p>Nvidia said cloud vendors and internet companies are buying up GPU chips and using the processors to train and deploy generative AI applications like ChatGPT.<\/p>\n<p>&#8220;At this point in the cycle, I think it&#8217;s really important to not fight consensus,&#8221; said Brent Bracelin, an analyst at Piper Sandler who covers cloud and software companies, in a Friday interview on CNBC&#8217;s &#8220;Squawk on the Street.&#8221;<\/p>\n<p>&#8220;The consensus is, on AI, the big get bigger,&#8221; Bracelin said. &#8220;And I think that&#8217;s going to continue to be the best way to play the AI trends.&#8221;<\/p>\n<p>Microsoft, which Bracelin recommends buying, rose 4.6% this week and is now up 39% for the year. Meta gained 6.7% for the week and has more than doubled in 2023 after losing almost two-thirds of its value last year. Alphabet rose 1.5% this week, bringing its increase for the year to 41%.<\/p>\n<p>One of the biggest drags on tech stocks last year was the central bank&#8217;s consistent interest rate hikes. The increases have continued into 2023, with the fed funds target range <span class=\"waslinkname\">climbing to 5%-5.25%<\/span> in early May. But at the last Fed meeting, some members indicated that they expected a slowdown in economic growth to remove the need for further tightening, according to minutes released on Wednesday.<\/p>\n<p>Less aggressive monetary policy is seen as a bullish sign for tech and other riskier assets, which typically outperform in a more stable rate environment.<\/p>\n<p>Still, some investors are concerned that the tech rally has gone too far given the vulnerabilities that remain in the economy and in government. The divided Congress is making a debt ceiling deal difficult as the Treasury Department&#8217;s June 1 deadline approaches.&nbsp;Republican negotiator Rep. Garret Graves of Louisiana told reporters Friday afternoon in the Capitol that, &#8220;We continue to have major issues that we have not bridged the gap on.&#8221;<\/p>\n<p>Treasury Secretary Janet Yellen <span class=\"waslinkname\">said later on Friday<\/span> that the U.S. will likely have enough reserves to push off a potential debt default until June 5.<\/p>\n<p>Alli McCartney, managing director at UBS Private Wealth Management, told CNBC&#8217;s &#8220;Squawk on the Street&#8221; on Friday that following the recent rebound in tech stocks, &#8220;it&#8217;s probably time to take some of that off the table.&#8221; She said her group has spent a lot of time looking at the venture market and where deals are happening, and they&#8217;ve noticed some clear froth.<\/p>\n<p>&#8220;You&#8217;re either AI or you&#8217;re not right now,&#8221; McCartney said. &#8220;We really have to be ready to see if we don&#8217;t get a perfect debt ceiling, if we don&#8217;t get a perfect landing, what does that mean, because at these kinds of levels we are definitely pricing in the U.S. hitting the high note on everything and that seems like a terribly precarious place to be given the risks out there.&#8221;<\/p>\n<p><strong>WATCH:<\/strong> <span class=\"waslinkname\">CNBC&#8217;s full interview with UBS&#8217; Alli McCartney<\/span><\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-107247296\">\n<div role=\"button\" id=\"Placeholder-ArticleBody-Video-107247296\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000300964\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/wp.worldtechguide.net\/wp-content\/uploads\/2023\/05\/the-tech-trade-is-back-driven-by-a-i-craze-and-prospect-of-a-less-aggressive-fed-1.jpg\" alt=\"Watch CNBC's full interview with UBS' Alli McCartney\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company&#8217;s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019. Patrick T. Fallon | Bloomberg | Getty Images Forget about the debt ceiling. Tech investors are in buy mode. The Nasdaq Composite closed out its &hellip;<\/p>\n","protected":false},"author":1,"featured_media":23003,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"hashtags":[],"_links":{"self":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/23002"}],"collection":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/comments?post=23002"}],"version-history":[{"count":0,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/23002\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media\/23003"}],"wp:attachment":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media?parent=23002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/categories?post=23002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/tags?post=23002"},{"taxonomy":"hashtags","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/hashtags?post=23002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}