Megacap technology and internet stocks rose on Monday, with names like Apple Inc. and Google owner Alphabet Inc. extending advances into record territory as optimism rose about their upcoming earnings results.
The Nasdaq 100, which is heavily weighted toward such names, rose 1.5% to an intraday record. The index is up 5% this month, and has climbed more than 90% from a low in March 2020.
“Despite the historic run we have seen in tech stocks over the past year, there is significant room to run higher,” Daniel Ives, an analyst at Wedbush, said in a note. Given tailwinds from cloud-computing, cybersecurity, and 5G, “our unwavering view is that tech stocks could have another 25%+ upward move in the cards for 2021.”
The upcoming earnings season would likely add to optimism surrounding the sector.
Among Monday’s notable gainers, Apple rose 4.3% and was on track for its fifth straight advance. The iPhone maker will report quarterly results later this week and analysts have been growing more bullish that the report will be strong.
Alphabet climbed as much as 1.6%. The stock also hit an intraday record and is up for a fifth session. The company will post results next week, and analysts anticipate more room for gains from both ad revenue and improved disclosures. Morgan Stanley wrote that Alphabet had upside potential of almost 50% when valued on a sum-of-the-parts basis.
The recent rally in megacap stocks was sparked by Netflix Inc., which last week reported subscriber numbers that were much stronger than expected.