Tech stocks just got off to their best start to the year since 1983. Portal/Eric Thayer
- The tech-heavy Nasdaq Composite is up 32% in the first half of 2023.
- According to the Financial Times, this is the index’s best start to the year in four decades.
- Fueled by the explosion of interest in AI, investors have rushed into big tech stocks over the past six months.
Artificial intelligence just gave tech stocks their best start to the year since 1983.
The Nasdaq Composite, which tracks the stock prices of over 2,500 companies and is heavily skewed towards technology, rose 32% in the first six months of 2023 — the best first half in four decades, according to Bloomberg data cited by the Financial Times was .
According to Dow Jones, the stock market index also posted its biggest six-month rise since the dot-com boom, which helped it surge 73% in the second half of 1999.
AI has driven much of the Nasdaq’s rise over the past six months, and since interest in ChatGPT exploded earlier in the year, investors have flocked to related stocks.
Chipmaker Nvidia, electric vehicle maker Tesla and social media giant Meta Platforms have emerged as three of the top winners from the AI craze.
Each of them posted triple-digit gains in the first half of 2023, cementing their status as members of a high-profile group of tech stocks some have dubbed “The Magnificent Seven,” along with Apple, Microsoft, Google parent Alphabet, and Amazon.
However, some analysts believe the Nasdaq’s sensational rise at the start of 2023 won’t last beyond the second half of the year, warning investors to take some profits now ahead of a potential correction in AI stock valuations.
“We do not believe the AI trend is a bubble, but advise investors to be selective in AI-related stocks following the strong year-to-date rally,” said Sundeep Gantori, equity strategist at UBS Global Wealth Management, in a recent research note.
Tech stocks have also benefited from the Federal Reserve easing its monetary tightening campaign in the first half of 2023 — because when interest rates stop rising, returns on investment opportunities like savings accounts tend to plateau, leading investors to do so prompted to look for other options such as B. Look for savings accounts rather than stocks.
Continue reading: Forget FAANG and GAMMA, the “Magnificent 7” tech stocks — including Tesla and Nvidia — now dominate the market
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