Tech stocks get off to strongest start since 1983 due to AI

Tech stocks just had their best start since 1983.

Reuters/Eric Thayer

The tech-heavy Nasdaq Composite is up 32% in the first half of 2023.
It marks the start of the index’s best year in 40 years, according to the Financial Times.
Investors have flooded into big tech stocks over the past six months, fueled by an explosion of interest in AI.

Artificial intelligence has given tech stocks the best start since 1983.

The Nasdaq Composite, which tracks the stock prices of more than 2,500 companies and focuses on tech stocks, is up 32% in the first half of 2023, the highest in 40 years, according to Bloomberg data cited by the Financial Times. It is said that it is the first half of the year. .

Stock market indexes also posted their biggest half-year gains since the dot-com boom, which surged 73% in the second half of 1999, according to the Dow Jones.

Much of the Nasdaq’s surge over the past six months has been AI-powered, and since interest in ChatGPT exploded earlier this year, investors have flocked to related stocks.

Chip maker Nvidia, electric car maker Tesla and social media giant Metaplatforms have emerged as the main winners of the AI boom.

The companies will post triple-digit gains in the first half of 2023, joining Apple, Microsoft, Google parent Alphabet and Amazon as members of what some have dubbed the “Magnificent Seven,” a booming group of tech stocks. solidified his position.

But some analysts believe the Nasdaq’s sensational rally in early 2023 won’t last until the second half of this year, and it’s time to book profits ahead of a potential repricing of AI stocks. warns investors to do so.

Sandeep Gantry, equity strategist at UBS Global Wealth Management, said in a recent research note, “We don’t think the AI trend is a bubble, but after a strong year-to-date rally, investors are looking at AI. We advise you to be selective about related stocks.”

Tech stocks are also benefiting from the Fed’s easing of its monetary tightening campaign in the first half of 2023. When interest rates stop rising, returns from investment vehicles such as savings accounts tend to plateau, prompting investors to look to other options such as: as a stock.

read more: Forget FAANG and GAMMA. “Magnificent 7” tech stocks, including Tesla and Nvidia, now dominate the market.