(Bloomberg) — With an escalating war in Europe, one could expect investors to be avoiding risk everywhere. Not so, as the rally in U.S. technology stocks over the past week indicates.
The Nasdaq 100 Index has jumped 5.4% since Russia invaded Ukraine as investors dialed back their expectations for Federal Reserve interest rate increases and after much of the pandemic period froth had been wiped out.
Fearing the economic damage from the war, traders have already ruled out an aggressive half-point rate hike this month, a view encouraged Wednesday by Fed Chair Jerome Powell.
Citigroup Inc. strategists upgraded technology stocks to overweight Thursday, saying growth stocks have been “more resilient.” Indeed, big technology stocks such as Apple Inc.
and Google owner Alphabet Inc. have fallen less than the S&P 500 Index’s 8% drop this year.
The Nasdaq 100 had narrowly escaped entering a bear market last month, when expectations for a faster rate-hike path from the Fed crushed high-growth stocks.
The selloff since early December has pushed the index’s valuation to 24 times forward earnings, a level last seen before the pandemic-led boom.
Mark Stoeckle, chief executive of Adams Funds, said some companies with solid balance sheets are now trading at attractive points.
“Three investors I know put money to work last Thursday using a 18-month time frame as their rationale,” he said.
Tech Chart of the Day
As the Nasdaq 100 sank almost 20% from its November peak, analysts didn’t reduce their stock price targets for the companies in the index at the same pace.
Now, even after the bounce of the past week, the targets imply a 25% rise for the shares in aggregate over the next year — the biggest forecast gain since the peak of the pandemic.
Top Tech Stories
- Peloton co-founder John Foley, who stepped down as chief executive officer last month, sold about $50 million of stock in the company to MSD Partners, a firm that manages money for billionaire Michael Dell
- Snowflake plunged almost 22% in premarket trading after projecting that annual product sales growth would slow from its previous triple-digit-percentage pace
- WeDoctor, one of China’s leading online health-care platforms, is laying off a substantial chunk of its workforce after plans for an initial public offering were disrupted, according to people familiar with the matter
- The Russian government is “throttling Twitter, Facebook, and Instagram platforms that tens of millions of Russia’s citizens rely on to access independent information and opinions and to connect with each other and the outside world,” the U.S.
State Department says in a statement
- Coupang, South Korea’s leading e-commerce company, reported a wider loss in the fourth quarter as the company continued to aggressively spend on infrastructure and services in the face of intensifying competition
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