Tech stocks on the Nasdaq 100, including Nvidia Corp., saw a surge to record levels this week, driven by Nvidia’s excellent earnings report. This marked the fifth consecutive week of gains for the Invesco QQQ Trust (QQQ), the longest streak since January. Shares of Nvidia rose over 9% following their first-quarter financial results, which showed a 262% increase in sales year-over-year, exceeding expectations and sparking a rally in semiconductor stocks.
Additionally, solar stocks, monitored through the Invesco Solar ETF (TAN), had their best week since December 2023, possibly in response to President Joe Biden’s tariffs on Chinese imports, particularly on solar cells. However, risk sentiment declined in non-tech sectors due to concerns raised by the Fed meeting minutes and S&P Global business surveys highlighting inflationary worries, leading to fears of long-term higher interest rates. This resulted in the Dow Jones falling on Thursday, experiencing its worst session in over a year.
Meme stocks, like GameStop Corp., experienced a decline in hype this week, with GameStop plummeting and ranking as the worst performer among Russell 1000 stocks. On the other hand, Wedbush Analyst Daniel Ives predicts trillion-dollar valuations in technology driven by the AI revolution, following Nvidia’s impressive quarterly results. Ives believes that AI will have a significant impact on the technology industry similar to the internet revolution in 1995, attracting major investors and fostering transformative growth.
Retail traders are increasingly concerned about inflation and are skeptical of the Federal Reserve’s rate cuts, according to a Charles Schwab confidence survey. Bullish sentiment on US stocks decreased in the second quarter, while a high percentage view cryptocurrencies as risky investments.
In regulatory news, the Securities Exchange Commission approved the first step towards Ethereum exchange-traded funds, indicating growing regulatory acceptance of cryptocurrencies and potentially attracting significant investment from major investors. The approval could open the door for greater mainstream and institutional investment in the second most valuable cryptocurrency.
Moreover, cryptocurrencies are becoming a significant issue in politics, with young voters favoring candidates supporting cryptocurrencies. Politicians are adjusting their stances to align with the growing influence of cryptocurrencies among voters.
Interest in meme stocks like GameStop and AMC Entertainment Holdings Inc. has diminished after Roaring Kitty exited social media. Investors on Reddit’s WallStreetBets forum have shifted their focus to other stocks, including Nvidia, Tesla, and Nikola Corp.
Overall, the tech sector, led by Nvidia, experienced significant gains this week, while concerns over inflation and interest rates impacted non-tech sectors. Cryptocurrencies are gaining political relevance, and meme stocks are losing their previous appeal among retail investors.
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https://www.benzinga.com/analyst-ratings/analyst-color/24/05/39014019/nvidia-tech-stocks-propel-nasdaq-100-to-record-high-solar-sector-shines-meme-stock-