Nasdaq records 5 weeks: Longest since November 2021

The Nasdaq just ended its fifth straight week of gains, up 3.3% over the past five days. This is the longest weekly winning streak for the tech index since a stretch ending in November 2021. worst year since 2008Nasdaq is up 15% in early 2023.

The last time tech stocks rallied for so long, investors are bracing for the electric car maker by Rivian blockbuster IPOThe US economy is shutting down strongest year growth since 1984, and Nasdaq is trading at record levels.

This time around, the champagne explodes much less. Cost-cutting has replaced growth on Wall Street’s checklist, and tech executives are being celebrated for its effectiveness on innovation. The IPO market dead. lay off very rich.

The earnings report is the story of the week, with results coming from many of the world’s most valuable tech companies. But the numbers are, for the most part, not good.

Apple missed estimate for the first time since 2016, Facebook parents meta record revenue fell for the third quarter in a row, Google‘s core advertising business shrinkand Amazon its closing weakest year for growth over its 25-year history as a public company.

While investors had mixed reactions to the individual reports, all four stocks closed the week with solid gains, as did Microsoftreported earnings last week and released fuzzy guide in the forecast revenue growth for this quarter is only about 3%.

Meta has been the top performer of the bunch this week, with the stock soaring 23%, its third best week ever. In it income statement Fourth, revenue was slightly above estimates, even as sales fell year-over-year and first-quarter forecasts came in close to expectations.

The key to the rally is the CEO by Mark Zuckerberg stated in the income statement that 2023 will be the year “Effective Year” and his promise that “we’re focused on being a stronger and more resilient organization.”

“It’s really a game-changer,” Stephanie Link, director of investment strategy at Hightower Advisors, said in an interview Friday with CNBC’s “Squawk Box.”

“The quarter itself was fine, but it was the cost-cutting that they ultimately respected, and that’s why I think Meta is really successful,” she said.

Zuckerberg admits that times are changing. From its IPO in 2012 to 2021, the company has grown between 22% and 58% annually. But in 2022, revenue fell 1%, and analysts predict growth of just 5% in 2023, according to Refinitiv.

On the earnings call, Zuckerberg said he doesn’t expect the drop to continue, “but I also don’t think it’s going back to the way it was.” meta announced in November, eliminating 11,000 jobs, or 13% of the workforce.

Link said the reason Meta’s stock jumped so much after the earnings report was because “expectations were too low and the valuation was so attractive.” The stock lost nearly two-thirds of its value last year, far more than its large-cap peers.

Apple, which fell 27% last year, is up 6.2% this week despite the report biggest drop revenue for seven years. CEO Tim Cook said results were influenced by a strong dollar, manufacturing issues in China affecting the iPhone 14 Pro and iPhone 14 Pro Max, and the overall macroeconomic environment.

“Apple is navigating a very difficult environment quite well overall,” Dan Flax, an analyst at Neuberger Berman, told “Squawk Box” on Friday. “As we go through the coming months and quarters, we’ll see growth return and the market will start to devalue that. We continue to like the name even in the face of great challenges. this tissue.”

Amazon CEO Andy Jassy, ​​who succeeded Jeff Bezos in mid-2021, took the unusual step of being on an earnings call with analysts on Thursday after his company released its report. forecast weaker than expected for the first quarter. In January, Amazon start layoffsis expected to result in the loss of more than 18,000 jobs.

Jassy said on the call: “As this past quarter was the end of my first full year in this role and with some unusual parts of our economy and business, I think this is a big deal. could be a good opportunity to get involved.”

Expense management has become a big topic for Amazon, which expanded rapidly during the pandemic and later admitted it hired too many people during that period.

“We’re working really hard to streamline our costs,” Jassy said.

The alphabet is also in minimized mode. The company announced last month that it is cutting 12,000 jobs. Its revenue shortfall in the fourth quarter includes disappointing sales on YouTube due to falling ad spend and weakness in the cloud division as businesses tighten their belts.

Ruth Porat, Alphabet’s chief financial officer, told CNBC’s Deirdre Bosa that the company is significantly slowing its hiring pace in an effort to deliver long-term profitable growth.

Alphabet shares ended the week up 5.4% even after giving up some of their gains in Friday’s sell-off. The stock is now up 19% for the year.

If Nasdaq continues its uptrend and hits a sixth week of gains, it would match its longest rally since a stretch that ended in January 2020, just before the Covid pandemic hit the US.

Investors will now turn to earnings reports from smaller companies. Some of the names they will hear from next week include Pinterest, Robin Hood hero, Confirm and cloud.

Another area in tech that’s grown strongly this week is the semiconductor space. Similar to consumer tech companies, there aren’t many growth ways to excite Wall Street.

AMD on Tuesday beat on revenue and profit but guided analysts to a 10% year-over-year decline in revenue in the current quarter. smartAMD’s main competitor, reports a miserable quarter last week and predicts a 40% drop in sales in the March quarter.

However, AMD is still up 14% for the week and Intel is up nearly 8%. Texas Instruments and Nvidia also recorded a good increase.

The semiconductor industry is facing an oversupply of components at PC and server makers, and falling prices for components like memory and central processing units. But after a miserable year in 2022, stocks are recover on signs that the Federal Reserve’s rate easing and softening inflation numbers will help companies grow later this year.

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