Large Tech Stocks Sets Bullish Tone for NASDAQ Index in 2021

Investor’s strategy of capitalizing on tech stocks selloff is helping in building a new momentum in the NASDAQ index, which is likely to continue for the next few months because the majority of big tech and information technology companies are seeing bright prospects ahead.

The record-breaking earnings performance from large tech stocks helped the tech-heavy NASDAQ index is bouncing back sharply after experiencing a big selloff last week.

“There’s optimism brewing underneath,” said Megan Horneman, director of the portfolio strategy at Verdence Capital Advisors. “The fact that markets have cooled down a bit with the retail-trading frenzy, that’s giving a little bit of optimism. Anytime there’s more stability to markets, there’s a breath of relief of all investors.”

NASDAQ Composite Index (COMP) Charting

Nasdaq index is hovering around a record level of 13639 points. Tech stocks including Apple (NASDAQ: AAPL) and Alphabet (NASDAQ: GOOG) were among the biggest contributors to the tech-heavy index in the past two days. Meanwhile, Amazon (NASDAQ: AMZN), Tesla (NASDAQ: TSLA), and several other high cap stocks are paring previous losses.

Mega-Tech Stocks Amazon and Google Released Lofty Revenue Growth Trends

Amazon’s quarterly revenue has topped the $125 billion mark for the first time in history, representing a 44% increase from the year-ago period. Its free cash flow came in at $31 billion in the trailing twelve months, up 20% Y/Y.

On the other hand, one of the slowest growing FAANG components Google’s stock price rallied 6% after the earnings release. This is because of quarterly revenue growth of 23.5% while and operating income jumped 69% to $15.65 billion.

Ruth Porat, CFO of Google and Alphabet, said:

“Our strong fourth-quarter performance, with revenues of $56.9 billion, was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year. Google Cloud revenues were $13.1 billion for 2020, with significant ongoing momentum, and we remain focused on delivering value across the growth opportunities we see.”

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