{"id":13849,"date":"2023-05-25T18:46:22","date_gmt":"2023-05-25T22:46:22","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/the-nasdaq-is-about-to-break-out-thanks-to-nvidia-heres-how-high-it-could-go\/"},"modified":"2023-05-25T18:46:23","modified_gmt":"2023-05-25T22:46:23","slug":"the-nasdaq-is-about-to-break-out-thanks-to-nvidia-heres-how-high-it-could-go","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=13849","title":{"rendered":"The Nasdaq Is About to Break Out Thanks to Nvidia. Here’s How High It Could Go."},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

The Nasdaq Composite is on a tear, approaching an important level as
\n Nvidia
\n and the semiconductor industry lift it higher. <\/p>\n

The tech-heavy
\n Nasdaq
\n gained almost 2% Thursday. The
\n Dow Jones Industrial Industrial Average,<\/span>
\n which consists of more mature companies, was slightly in the red. <\/p>\n

\n

The Nasdaq\u2019s gain is driven by Nvidia stock (ticker: NVDA), which gained 24% after its per-share earnings beat estimates by 18%. The company also issued a bright sales outlook, partly\u00a0<\/strong>driven by the growth of data chips and optimism over artificial intelligence. <\/p>\n

Its market value was just over $750 billion coming into Thursday\u2019s trading, which was\u00a0<\/strong>just over 3% of the Nasdaq\u2019s aggregate market value, so the chip-making innovator is bringing the index higher.\u00a0<\/p>\n

Nvidia\u2019s results were also lifting other names in the industry or with ties to it:
\n Taiwan Semiconductor Manufacturing
\n (TSM),
\n Applied Materials
\n (AMAT),
\n Lam Research
\n (LRCX), and
\n Advanced Micro Devices
\n (AMD). These companies combined for a market cap of about $800 billion coming into Thursday, helping push the Nasdaq upward.\u00a0<\/p>\n

It is yet another booster for a tech sector that has been surging. The Nasdaq is up about 21% for the year now, as other companies such as
\n Microsoft
\n (MSFT) embed AI into their products, enabling them to capture more of a growing information technology market.\u00a0<\/p>\n

Now, the Nasdaq is almost at a key level of almost 12,700. It couldn\u2019t surpass a level of roughly 12,000 from March to September, but with AI advancements spurring more earnings growth, buyers are willing to come in to send the index higher. <\/p>\n

Thursday\u2019s gain brings it closer to 13,000, the index\u2019s peak in August. If it can move above that, it means investors finally see a reason to buy there.\u00a0<\/p>\n

Getting to that point fairly soon seems realistic, given other technical indicators. The index\u2019s 50-day moving average is just over 12,100, and has risen in the past few months, according to FactSet. In the last few days, it has risen further above the 200-day moving average of about 11,500. When a more recent average of prices moves above a longer-run average, which encapsulates lower prices from before the rally, it means buying pressure has recently built up. That signifies increasing confidence in tech names. <\/p>\n

The Nasdaq may pause from the gains near 13,000, but whether it sees harsh selling pressure there or more of a flatlining\u2014in which case buyers would still be fairly active\u2014will be telling.\u00a0<\/p>\n

\u201cThe zone from 13k up to 13.2k will be the next important resistance zone to punch through,\u201d said Frank Cappelleri, CappThesis.com founder, who also mentioned the rising moving average is a positive sign.\u00a0<\/p>\n

If the Nasdaq\u2019s technicals do look encouraging, that isn\u2019t a huge surprise given more fundamental analysis. Analyst\u2019s aggregate EPS estimates for Nasdaq companies call for a roughly 17% annual growth rate from the end of 2022 through 2025, according to FactSet, forecasts that could even get a boost from semiconductor analysts Thursday. <\/p>\n

The Nasdaq\u2019s forward price-to-earnings ratio is about 26 times, which is only about 1.5 times the expected growth rate. That isn\u2019t so bad, considering the
\n S&P 500\u2019s<\/span>
\n P\/E multiple is just over two times expected EPS growth, so tech investors are paying less for more earnings growth. That could be another factor keeping buyers engaged.\u00a0<\/p>\n

Let the chips fall where they may, but tech stocks look like they have begun a longer-term run.\u00a0<\/p>\n

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Nasdaq Composite is on a tear, approaching an important level as Nvidia and the semiconductor industry lift it higher. The tech-heavy Nasdaq gained almost 2% Thursday. The Dow Jones Industrial Industrial Average, which consists of more mature companies, was slightly in the red. The Nasdaq\u2019s gain is driven by Nvidia stock (ticker: NVDA), which […]<\/p>\n","protected":false},"author":1,"featured_media":13850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-13849","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nThe Nasdaq Is About to Break Out Thanks to Nvidia. 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