U.S. markets close in 3 hours 52 minutes
  • S&P 500

    3,870.22
    -55.21 (-1.41%)
     
  • Dow 30

    31,650.64
    -311.22 (-0.97%)
     
  • Nasdaq

    13,309.67
    -288.30 (-2.12%)
     
  • Russell 2000

    2,243.39
    -40.99 (-1.79%)
     
  • Crude Oil

    63.59
    +0.37 (+0.59%)
     
  • Gold

    1,778.50
    -19.40 (-1.08%)
     
  • Silver

    27.84
    -0.09 (-0.32%)
     
  • EUR/USD

    1.2237
    +0.0068 (+0.56%)
     
  • 10-Yr Bond

    1.4540
    +0.0650 (+4.68%)
     
  • GBP/USD

    1.4105
    -0.0036 (-0.26%)
     
  • USD/JPY

    106.2330
    +0.3510 (+0.33%)
     
  • BTC-USD

    50,516.12
    +493.74 (+0.99%)
     
  • CMC Crypto 200

    1,009.55
    +14.89 (+1.50%)
     
  • FTSE 100

    6,651.96
    -7.01 (-0.11%)
     
  • Nikkei 225

    30,168.27
    +496.57 (+1.67%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

3 reasons why the Nasdaq Composite is soaring again

Brian Sozzi
·Editor-at-Large
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

After a November where Dow 30,000 got all the attention and the Nasdaq Composite mostly lagged relative to the S&P 500 and Dow as investors ate up value stocks, the tech heavy benchmark has come back en vogue this month...in a big way.

Read more: What is the NASDAQ? Here are the basics

Through Dec. 8, the Nasdaq Composite (^IXIC) has tacked on nearly 3% compared to more modest gains for the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) per Yahoo Finance Premium data. On Monday, the Nasdaq hit its third straight record high in as many days — it has set an all-time high in four of the past five sessions. Gains have been powered by a who’s who of high-beta Nasdaq names such as Tesla (TSLA) (up 7% month to date) and Netflix (NFLX) (up 2.5% month to date).

Yahoo Finance chatted up several strategists on Wall Street to get their take on the strong move in the Nasdaq. Here’s how they boiled down the bullish action.

Favorable semiconductor news

Semiconductor giant Micron’s (MU) upbeat guidance last week for its most recent quarter was a buy signal on tech stocks, Sevens Report Research founder Tom Essaye says.

“Semiconductors have been on fire and not just from momentum — it’s been good earnings/guidance too from Micron and others,” Essaye explained.

Micron raised its sales guidance by about $700 million and took up the low end of its earnings guidance by 29 cents, suggesting demand for computing gear remains solid despite a tick-down in global economic growth due to the resurgent COVID-19 virus.

Yahoo Finance heard a similar bullish tone on computer demand from a key Intel (INTC) executive on Tuesday as well.

Demand in PCs has remained strong,” Intel executive vice president and client computing group president Gregory Bryan told Yahoo Finance Live.

COVID-19 flares back up

Value stocks were in favor for much of November as investors drew some hope from COVID-19 infection numbers. But with COVID-19 surging again in most parts of the world, investors have rotated back into big cap tech stocks that are somewhat immune to the pandemic and could still put up strong growth in 2021.

“After lagging following the positive vaccine developments and an epic rotation into the “reopening trade,” rising COVID case numbers are part of what has aided Tech more recently,” Truist/SunTrust Advisory chief markets strategist Keith Lerner says.

The rotation isn’t too different than what happened at the start of the pandemic. From Feb. 1 through April 30, Netflix (NFLX) and Amazon (AMZN) shares rose 20% and 16%, respectively. The Dow lost 17% during that stretch, while the S&P 500 shed 13%.

Strong work-from-home company earnings

Somewhat under the radar, several big tech names powering work-from-home life have blown away with their earnings results and outlooks.

Tech watchers on the Street think the reports have also been a bullish signal to tech stocks more broadly.

File-This April 18, 2019, file photo shows a Zoom ad, in New York. Zoom’s videoconferencing service remains a fixture in pandemic life, but its breakneck growth is showing signs of tapering off as investors debate whether the company will be able to build upon its recent success after a vaccine enables people to intermingle again. Zoom highlighted its head-spinning success story again Monday, Nov. 30, 2020, with the release of its quarterly results for the August to October period. (AP Photo/Mark Lennihan, File)
File-This April 18, 2019, file photo shows a Zoom ad, in New York. Zoom’s videoconferencing service remains a fixture in pandemic life, but its breakneck growth is showing signs of tapering off as investors debate whether the company will be able to build upon its recent success after a vaccine enables people to intermingle again. Zoom highlighted its head-spinning success story again Monday, Nov. 30, 2020, with the release of its quarterly results for the August to October period. (AP Photo/Mark Lennihan, File)

“The earnings and fundamental performance out of golden work from home names such as Zscaler, Zoom, Docusign, Okta, and Crowdstrike among others shows this tech party is going to continue well into 2021,” Wedbush tech analyst Dan Ives said.

Yahoo Finance isn’t surprised to hear this type of sentiment on the Street:

  • DocuSign (DOCU) CEO Dan Springer told Yahoo Finance last week demand remains very strong for digital documents, especially overseas.

  • Zoom (ZM) has just won Yahoo Finance’s prestigious ‘Company of the Year’ award. Several Zoom executives sounded very upbeat on the road ahead in interviews with Yahoo Finance.

  • Okta (OKTA) CEO Todd McKinnon sounded like a man on a mission in a post earnings interview with Yahoo Finance last week.

  • Crowdstrike (CRWD) CEO George Kurtz laid out why his company continues to be so successful during the pandemic in a recent interview with Yahoo Finance.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

What’s hot from Sozzi:

Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit.