Amazon (AMZN) - Get Amazon.com, Inc. Report, Apple (AAPL) - Get Apple Inc. (AAPL) Report Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report and Nvidia (NVDA) - Get NVIDIA Corporation Report alongside Facebook (FB) - Get Facebook, Inc. Class A Report, Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report, Alphabet-owned Google (GOOGL) - Get Alphabet Inc. Class A Report and Tesla (TSLA) - Get Tesla Inc Report are the new market leaders amid a post-pandemic acceleration in growth that is driving investors back to proven tech heavyweights.
Eight large-cap tech companies accounted for more than half of the S&P 500’s 7.3% gain from a near-term low on May 12 through early July, with Apple, Amazon, Alphabet, Facebook, Microsoft, Netflix, Nvidia and Tesla pushing the broader index to new highs, according to a Bespoke Investment Group research note cited by The Wall Street Journal over the weekend.
The strong showing for tech marks a sharp shift from earlier in the year, when investors focused on buying shares of companies like banks and energy that would prosper if the U.S. economy continued its rapid recovery from the COVID-19 pandemic.
For TheStreet’s Jim Cramer, it’s not only the prospects of big tech fueling the next Wall Street revenue and profit surge: It’s big tech fueling the broader technology ecosystem, which also includes small businesses that can feed off the same demand.
"They grow the top line by hiring. They need people to make more and sell more," Cramer said recently.
Beyond that, companies like Nvidia continue to exhibit strength amid demand for video graphics cards and related semiconductors, Cramer noted in a separate column last week.
Keybanc analyst last week John Vinh lifted his one-year price target on Nvidia to $950 from $775, following in the footsteps of BMO Capital Markets analyst Ambrish Srivastava, who just the week before lifted his own price target on the chip titan to a Wall Street high of $1,000.
At the same time, Chinese big-tech companies including Didi Global (DIDI) - Get DiDi Global Inc. Report, Tencent (TME) - Get Tencent Music Entertainment Group Sponsored ADR Class A Report, and Alibaba (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report have fallen out of favor amid a regulatory crackdown on overseas-listed companies that will force them to report what Beijing says is critically sensitive privacy data to the government first.
At last check, shares of Didi Global were down 5.28% at $11.40. The stock has fallen nearly 20% since going public on July 2.