Despite the massive coronavirus related selloff early this year, the tech-heavy Nasdaq index crossed 10,000 points milestone for the first time in history on Wednesday, thanks to the robust performance from big tech giants like Amazon, Facebook, Apple, Microsoft, and several others.
The majority of tech companies have been trading around an all-time high at present after a rout in February.
The robust upside momentum is supported by investor’s strategy of adding tech stocks to their portfolio as staying at home policies enhanced the technological usage.
“We actually have a pretty healthy pipeline of listing candidates over the coming weeks and months that continue to see the public markets as their path to the future. That sense of access to permanent capital has never been stronger in their minds,” Nasdaq President and CEO Adena Friedman said during an interview with Mike Milken for the “Conversations with Mike” podcast.
The share prices of Amazon and Apple are trading at record levels while Tesla shares have breached the $1,000 level for the first time in history.
The Nasdaq index rebounded almost 45% from its March lows and it is up 11% this year. The rally is stunning for many analysts as the United States has now been in recession following historic job loss and business disruptions due to the lockdowns. The unrest related to the killing of George Floyd has also added to economic pain.
On the other hand, bulls believe that the index has further upside potential despite the recent run. This is because the big tech giants are likely to generate high double-digit revenue and earnings growth in the coming years.
“Investors who bought the Nasdaq 100 index at this previous peak would have earned an annualized return of 10.4% over the next 10 years as the earnings of the technology companies that make up the index grew by 14.5% a year,” Mr. Garnry, head of the equity strategy at Saxo Bank said.