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Tech stocks are driving the market but will this rally last?

ByFederica Montella
Published 20/06/2023, 11:27
Updated 28/07/2023, 11:55

The Nasdaq Composite is booming: why?

The US heavy tech index, Nasdaq, has increased for the past eight consecutive weeks.

The reason behind the recent gains is that investors are buying tech stocks driven by their enthusiasm for Artificial intelligence, in fact, the most bought stocks in recent days are the ones that have invested in AI.

I am talking about the following big companies: Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Meta (NASDAQ:META).

At this point, the question is: does the recent rally have more space to go up or not?

Investors are divided into two categories, some believe that the markets have still room to go up and some investors, instead, are sceptical due to the actual economic situation.

Investors that believe in more gains are betting on the fact that the Federal Reserve will not hike the interest rates anymore this year, even though that is not what Jerome Powell said during the last press conference.

The markets will be heavily impacted if the Federal Reserve will decide to increase the interest rates again next month, after June's pause.

Investors who doubt that the recent rally can last longer are looking at the past years when the markets have crashed in 1999 when the dot.com bubble exploded.

Artificial Intelligence is going to affect everyone's life in the near future but, at this time, it is not easy to identify which one of the actual blue-chip companies will be able still be profitable in the long term.

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