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What's Next for Tech Stocks? (3 Upcoming Catalysts to Watch)
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Over the past year, the tech-heavy Nasdaq 100 ETF ((QQQ - Free Report) ) is up a robust 44.38%. The Nasdaq and the rest of the major market indices bottomed in late 2022, against all odds and amidst a cloudy macroeconomic backdrop. In classic form, the market was the master manipulator, bottoming while inflation was at 40-year highs, the Fed was raising rates, and tech stocks had been down-trending for months. The move higher in equities was a great example of how the market tends to discount the future and tends to turn when things look the bleakest.
Fast forward to today’s market, and the environment couldn’t be more different. Inflation has slowed, the AI revolution is in full swing, and investors are overwhelmingly bullish on equities. What’s next for tech stocks? Look to the upcoming catalysts. The following three catalysts will have the biggest impact on tech stocks over the coming weeks:
2/14: Nvidia Earnings
Fellow semiconductor stock Nvidia ((NVDA - Free Report) ) is the undisputed leader and most significant beneficiary of the AI revolution. NVDA, which has ballooned into the world’s third-largest company, will report earnings Wednesday after the close. The company has delivered positive surprises versus Zacks Consensus Estimates for four straight quarters. Will another earnings surprise drive shares even higher, or is the good news priced in already, leading to a “sell the news” event? Either way, NVDA’s earnings will drive tech stocks in the short term.
Image Source: Zacks Investment Research
2/21: Minutes of Fed’s January FOMC Meeting
An old Wall Street adage warns investors, “Do not fight the Fed!” Liquidity drives markets, and central banks control much of the liquidity through monetary policy. Recently, the odds of an interest rate cut have declined significantly. “Higher rates for longer” would be a potential headwind for tech-focused investors.
3/12: Arm Lock-up Period Expiration
An IPO lockup period is a contractual restriction that prevents company insiders, such as executives and early investors, from selling their shares for a specified duration after the initial public offering IPO (IPO). When the lock-up period expires, these insiders can sell their shares, potentially flooding the market with additional supply. The sudden increase in available shares can create an imbalance between supply and demand, putting downward pressure on the stock price as more shares are offered for sale.
Japanese multinational investment holding company SoftBank Group owns 91% of high-flying semiconductor stock Arm Holding ((ARM - Free Report) ), and only 5 % of the company’s shares are available to the public to trade! With ARM up some 96% since its IPO in September, the lockup expiration date of March 12th is worth watching as it may lead to downward selling pressure on the semiconductor industry as insiders look to cash out their massive gains.
Image Source: Zacks Investment Research
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What's Next for Tech Stocks? (3 Upcoming Catalysts to Watch)
Over the past year, the tech-heavy Nasdaq 100 ETF ((QQQ - Free Report) ) is up a robust 44.38%. The Nasdaq and the rest of the major market indices bottomed in late 2022, against all odds and amidst a cloudy macroeconomic backdrop. In classic form, the market was the master manipulator, bottoming while inflation was at 40-year highs, the Fed was raising rates, and tech stocks had been down-trending for months. The move higher in equities was a great example of how the market tends to discount the future and tends to turn when things look the bleakest.
Fast forward to today’s market, and the environment couldn’t be more different. Inflation has slowed, the AI revolution is in full swing, and investors are overwhelmingly bullish on equities. What’s next for tech stocks? Look to the upcoming catalysts. The following three catalysts will have the biggest impact on tech stocks over the coming weeks:
2/14: Nvidia Earnings
Fellow semiconductor stock Nvidia ((NVDA - Free Report) ) is the undisputed leader and most significant beneficiary of the AI revolution. NVDA, which has ballooned into the world’s third-largest company, will report earnings Wednesday after the close. The company has delivered positive surprises versus Zacks Consensus Estimates for four straight quarters. Will another earnings surprise drive shares even higher, or is the good news priced in already, leading to a “sell the news” event? Either way, NVDA’s earnings will drive tech stocks in the short term.
Image Source: Zacks Investment Research
2/21: Minutes of Fed’s January FOMC Meeting
An old Wall Street adage warns investors, “Do not fight the Fed!” Liquidity drives markets, and central banks control much of the liquidity through monetary policy. Recently, the odds of an interest rate cut have declined significantly. “Higher rates for longer” would be a potential headwind for tech-focused investors.
3/12: Arm Lock-up Period Expiration
An IPO lockup period is a contractual restriction that prevents company insiders, such as executives and early investors, from selling their shares for a specified duration after the initial public offering IPO (IPO). When the lock-up period expires, these insiders can sell their shares, potentially flooding the market with additional supply. The sudden increase in available shares can create an imbalance between supply and demand, putting downward pressure on the stock price as more shares are offered for sale.
Japanese multinational investment holding company SoftBank Group owns 91% of high-flying semiconductor stock Arm Holding ((ARM - Free Report) ), and only 5 % of the company’s shares are available to the public to trade! With ARM up some 96% since its IPO in September, the lockup expiration date of March 12th is worth watching as it may lead to downward selling pressure on the semiconductor industry as insiders look to cash out their massive gains.
Image Source: Zacks Investment Research