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Tech investors are heading towards Thanksgiving with a buoyant mood. Last week, the Nasdaq Composite index climbed 2.4%, marking a 12% rise over the past three weeks. The upsurge is the most significant since April 2020, when the onset of COVID-19 and related stay-at-home orders spurred a spike in e-commerce and cloud software stocks.
Intel (NASDAQ:INTC) emerged as the top performer in the large-cap tech sector this week, with a 13% increase in its share price. Intel shares have surged 35% since the chip maker beat Wall Street revenue and estimates in its quarterly results reported on October 26.
Mizuho Securities upgraded Intel to a 'buy' rating from 'neutral' this week, pointing to a refocused strategy on its data center business and a promising customer pipeline, which could lead to increased market share and improved profit margins.
Nvidia to report results on Tuesday
Next week, semiconductors will be the focal point for tech investors, with Nvidia (NASDAQ:NVDA) set to announce its results on Tuesday. The stock has risen 22% in the last three weeks, with year-to-date gains reaching 237%, outperforming all other S&P 500 companies.
Nvidia, a key player in the generative artificial intelligence boom, provides the GPUs required for these demanding processes. The company is expected to reveal over 170% revenue growth in its upcoming earnings report in the third quarter. Analysts anticipate Nvidia's forecast for the fourth quarter to indicate nearly 200% growth, as per LSEG.
Eric Jackson, founder of EMJ Capital, shared on CNBC’s “Closing Bell” that all eyes are on Nvidia’s upcoming earnings. He considers Nvidia his "top large-cap pick" and believes the market is in the early stages of a rebound linked to the anticipated end of Federal Reserve rate hikes.
The Fed's benchmark borrowing rate, currently at its highest in 22 years, is expected to start declining from May, with projections of a full percentage point reduction by the end of 2024, according to CME Group's FedWatch.
Tech stocks, susceptible to interest rate changes, tend to benefit from low borrowing costs, encouraging risk-taking, whereas higher rates steer investors towards safer assets.
The broader market received a lift this week from moderate U.S. inflation data. The Consumer Price Index (CPI) remained unchanged in October, defying expectations of a 0.1% increase. This data fueled optimism that the Fed's rate-hiking period might be drawing to a close.
Airlines expect record travel in Thanksgiving 2023
Airlines are anticipating an unprecedented surge in travel demand this Thanksgiving, and industry leaders assure they are ready to handle the influx.
The Transportation Security Administration (TSA) is preparing to screen about 30 million passengers from November 17 to November 28, setting a new record. The peak travel day is predicted to be the Sunday following Thanksgiving, with around 2.9 million passengers expected to fly.
The holiday season at the end of the year is a vital period for airlines to boost their revenues. In times excluding peak holidays or high-demand periods, airlines often resort to lowering fares or curtailing expansion as the initial post-pandemic travel surge aligns more closely with historical patterns. However, they are also grappling with increased costs for fuel and labor, which have been impacting their profit margins.
Nonetheless, the high-demand travel days surrounding the holidays continue to attract high ticket prices.
This Thanksgiving will serve as a crucial indicator of how the airline industry copes with the pressures of the holiday season, especially while navigating ongoing challenges such as the persistent shortage of air traffic controllers.
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