People shop at an Apple store in Annapolis, Maryland, in February.
Jim Watson/Getty Images
and the rest of Big Tech have helped push the Nasdaq-100 into a new bull market, prompting concern that the rally is overdone. But there is a case to be made for further gains.
Apple (AAPL) stock is up about 30% from a low point hit in early January. That has helped the Nasdaq-100 Index, which tracks about 100 of the nonfinancial companies with the biggest market capitalizations on the tech-heavy Nasdaq exchange, to gain about 23% from its December low point.
Any gain of 20% or more from a low puts an index into bull-market territory.
Falling yields for long-dated bonds have been behind the gains in recent weeks. Lower yields make future profits more valuable — and many fast-growing tech companies are valued on the basis that the majority of their profits will roll in many years in the future.
Given the gains, some are warning that tech stocks look more like sells, not buys.
First off, they argue, the Nasdaq-100 hasn’t yet reached the 13,500 level where sellers came in in August, knocking the index lower. It is currently hovering just over 13,000.
It could easily lose steam before it surpasses 13,500 if the Federal Reserve has reason to keep rates higher for longer than the market currently anticipates.
The other red flag is that a lot of stocks on the index haven’t contributed much to the index’s gain. Apple, Meta Platforms (META),
(NVDA) are leading the way. All of those names except for…