In the latest Daily Market Notes report for investors, analysts at Navellier & Associates said strong earnings reports from Microsoft (NASDAQ: ) and Alphabet (NASDAQ: ) boosted the outlook for the AI sector and the current earnings season. Reinforced again.
Bouncing back from the first major pullback since the strong rally that began in late October, stocks are having their best week of the year. Analysts highlighted, once again, that big tech is leading the way, with an impressive 3.3 percent gain this morning and 4.4 percent gain for the week.
Despite cautious comments from Taiwan Semiconductor ( TSM ) that previously weighed on Nvidia's ( NVDA ) stock, assurances from major tech firms about significant investment in AI infrastructure sent NVDA up to $873. went
The return to optimism was helped by a strong print from Alphabet, which not only beat earnings expectations but also announced a significant share buyback and a new dividend, sending its shares up 10% today to record highs. Reached the heights.
“Strength was crucial for large tech earnings, as they not only have a large weighting in the indexes, but also a large share of overall earnings,” the analysts said.
However, not all tech companies fared well, he continued.
Intel (NASDAQ: ) reported disappointing top-line results and lower-than-expected margins, lacking prominent AI exposure Its stock fell 11.2 percent.
In the broader market, concerns about a higher personal consumption expenditures (PCE) inflation number eased as both headline and core PCE for March were in line with forecasts, giving relief to the bond market.
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Meanwhile, modest declines in U.S. 10-year Treasury note and yields reflect the market's adjustment to a longer path of deflation.
On the consumer front, the latest University of Michigan survey indicated stable inflation expectations but a slight dip in consumer sentiment, near a three-year high.
Sector-specific performance has varied with Exxon (CVX). Chevron (NYSE: ) (NYSE: ) suffered a decline after declining earnings expectations, in contrast to energy stocks' minimal impact on broader indices.
“Overall, this week's strong recovery supports a buy-sell mentality, and the key AI theme is on track, all with continued uncertainty about where the Fed will raise rates,” the analysts said. When will it decrease,” analysts said.
“With employment firming, and extended consumers still spending – April personal spending came in at +0.8%, better than forecasts of 0.6%,” he added.