Interactive Investor

Fresh optimism triggers another tech stock boom

After Apple shares sprung to life on Tuesday, there’s further buying as investors chase the big names higher. Here are the stocks driving markets to new highs.

12th June 2024 15:52

by Graeme Evans from interactive investor

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Inflation cheer today kept Wall Street’s Magnificent Seven on a roll after last night’s strongest session for Apple Inc (NASDAQ:AAPL) shares since November 2022.

This afternoon’s softer-than-forecast US inflation print of 3.3% boosted confidence that Federal Reserve policymakers have room to cut interest rates at least twice later this year.

The latest bout of Wall Street optimism pushed the S&P 500 index and tech-focused Nasdaq up by more than 1% to fresh records, with Amazon.com Inc (NASDAQ:AMZN) the only one of the Magnificent Seven mega-cap stocks to open lower.

NVIDIA Corp (NASDAQ:NVDA) rose 3% in its strongest performance since last week’s stock split, while Apple added 4% to the 7% surge of last night that took its valuation back above the $3 trillion mark.

The return of the iPhone giant to a record high represents a swift turnaround in fortunes from two months earlier, when shares were 17% lower than December’s previous all-time high.

Investor concerns over its AI strategy were answered during this week’s Worldwide Developers Conference at the tech giant's headquarters in California, where it unveiled a suite of new features branded as Apple Intelligence as well as a new partnership with OpenAI.

Morgan Stanley responded to the launch by saying it now has “even greater conviction” that Apple is on the cusp of a multi-year product refresh. It said this confidence underpinned an overweight rating, $216 price target and $270 bull case valuation.

As the new AI functionality will be on just 8% of the current iPhone and iPad installed base, the Wall Street bank believes this autumn’s roll-out of the new personal intelligence system can ignite a fresh device refresh cycle among Apple’s 1.3 billion-plus users.

It adds that Apple shares have historically outperformed the market when replacement cycles are contracting. Apple Intelligence is due to be added to a new version of the iOS 18 operating system, which was also unveiled at this week’s conference.

One of today’s strongest Wall Street’s performances was by Oracle Corp (NYSE:ORCL) after the cloud technology firm highlighted strong AI-led momentum in last night’s full-year results.

In the fourth quarter, it said it signed over 30 AI sales contracts totalling more than $12.5 billion — including one with OpenAI to train ChatGPT in the Oracle Cloud.

Chief executive Safra Catz expects double-digit revenue growth this fiscal year and for each successive quarter to grow faster than the previous quarter.

The shares opened today’s session more than 12% higher at $139.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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