NASDAQ Hangs In The Doldrums Despite Optimism Around Big Tech Earnings

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The big tech firms, which many traders and analysts often regard as fundamental components of the NASDAQ Composite Index, which tracks over 2,500 stocks listed on the technology company-friendly NASDAQ exchange in New York, are heading toward earnings announcements.

Ordinarily, large, well-established corporations announcing their periodical earnings and commercial results would not be hugely interesting, but when considering the amount of volatility among the share prices of America’s ‘big tech’ companies, these figures are likely to be eagerly awaited.

Yesterday evening during the later hours of the day in New York, Netflix announced its results for the first quarter of 2023, and today Tesla is set to report its metrics for the same period.

These two large-cap companies may well operate in two totally different sectors, one being electric vehicles and the other being on-demand television and movie streaming, but they both represent mainstays of the publicly listed American stock scene.

Both Tesla and Netflix have arrived at the end of the first quarter of this year with an impressive set of figures to display to their shareholders, and in doing so, have contributed toward the bolstering of confidence in a potential resurgence of value in big tech stocks.

However, despite this, the NASDAQ Composite Index remained slightly down at the end of the New York trading session yesterday, even though the upturn in fortunes for three big tech firms was on the cards, those being the aforementioned Tesla, whose results are expected today, and Netflix, as well as graphics card manufacturer NVIDIA which has been performing very well recently. NVIDIA’s fortunes were affected two years ago by the sudden intervention in cryptocurrency mining by vast, industrial-scale Chinese mining firms which were using graphics cards within their enormous mining rigs.

The Chinese government’s seizure of many large mining rigs caused a downturn in NVIDIA graphics card sales, but this resumed very quickly as many such entities relocated their operations to other regions with cheap (and sometimes free!) electricity, such as Kazakhstan, Armenia and certain areas in Latin America and continued to mine.

NVIDIA remains one of the only retail computer hardware manufacturers that tops the stock market mainly because of its products’ popularity among cryptocurrency miners; most other hardware firms do not feature as they did over a decade ago, as we live in an age of cloud computing and less reliance on physical hardware these days.

The NASDAQ Composite Index finished the day yesterday 4.3 points down over the previous close, resting at 12,153.41, which is interesting considering that the downward turn took place on the day before Netflix released these positive earnings, optimism abounds for a positive report from Tesla today, and NVIDIA, which reports in May this year, has been a star performer on the stock market since the beginning of 2023.

Over the past five days, for example, the NASDAQ Composite Index has risen by over 42 points, with yesterday representing a tailing off.

Over a six month moving average, the NASDAQ Composite Index is at its third highest point, which is encouraging given that last year’s markets were not kind to the very same tech stocks that had made tremendous headway during 2020 and 2021 in an environment in which government policy changed the behaviour of many citizens of Western countries and drove a huge shift toward online commerce.

There is still a lot of headway to make before the NASDAQ Composite Index returns to its position of this time last year, when it was standing at 13,619 before the tech stock tumble took it down to 10,646 in June of the same year, just two months later.

It did climb again but suffered two major slumps for relatively sustained periods during the past year.

Volatility certainly abounds on the NASDAQ exchange, as the combination of meme stocks, high-value sudden entries via SPAC listings and the well-established but volatile big tech sector keeps things moving!

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