NASDAQ 100’s surge continues as NVIDIA joins the $1 trillion club

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on May 30, 2023
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  • NVIDIA’s market capitalization exceeded $1 trillion
  • Cost-cutting and the AI emergence have fueled the tech sector’s rally
  • The technical picture favors more upside for the NASDAQ 100 index

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The NASDAQ-100 index is surging. It is up more than +32% YTD, and investors can’t get enough tech stocks as they wish.

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Several factors contributed to the resurgence. For example, some companies, such as Amazon (NASDAQ:AMZN) or Meta (NASDAQ:META), have discovered the merits of cost-cutting. The result? Investors rewarded them with higher stock prices.

Also, new bets on new industries have led to impressive gains as FOMO (fear of missing out) dominates. Huge bets on the future of AI led to NVIDIA (NASDAQ:NVDA)to enter the select club of $1 trillion companies.

The technical picture favors more upside for the NASDAQ 100 index

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2022 was not the year of technology sector investors, as the NASDAQ 100 index declined abruptly. But it did bottom in October, and, by the end of the year, it formed a bullish reversal pattern – a double bottom.

NASDAQ 100 chart by TradingView

From then on, it all went smoothly for the bulls. First, the pattern’s neckline offered resistance but was quickly overcome.

Second, when a bullish flag ended, the resistance area turned into support. Finally, the 13,500 acted as a pivotal area. By breaking above, the market broke the lower highs series belonging to the previous bearish trend.

Summing up, the big tech turnaround was fueled by the emergence of AI and cost-cutting measures taken by key companies. If the Fed decides to pause its interest rate hikes, stocks should rally, and Nasdaq is one of the favorites to post some more gains on the year.

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