Nvidia, Tech Stocks Propel Nasdaq 100 To Record High; Solar Sector Shines, Meme Stock Bubble Bursts: This Week In The Market

Tech stocks in the Nasdaq 100, as tracked by the Invesco QQQ Trust QQQ, soared to record highs during the week, marking their fifth consecutive week of gains — the longest streak since January — driven by Nvidia Corp.‘s NVDA exceptional earnings report.

Shares of the artificial intelligence giant surged over 9% following its first-quarter financial results, which revealed a 262% year-over-year increase in sales, exceeding expectations and sparking a broad-based rally in semiconductor stocks.

Solar stocks, as monitored through the Invesco Solar ETF TAN, enjoyed their best week since December 2023, potentially in response to President Joe Biden's increased tariffs on Chinese imports, including a significant hike on solar cells.

Risk sentiment waned in non-tech sectors, as hawkish Fed meeting minutes and S&P Global's business surveys indicated renewed inflationary concerns, raising fears of prolonged higher interest rates. The Dow Jones fell on Thursday, suffering its worst session in over a year.

The hype around meme stocks deflated this week, with GameStop Corp. GME plummeting and marking the worst performance among Russell 1000 stocks.

AI's Trillion-Dollar Market

Wedbush analyst Dan Ives forecasts trillion-dollar valuations in tech, driven by the AI revolution, following Nvidia’s stellar quarterly results. Nvidia’s data center business grew 427%, fueling its stock rally. Ives likens the AI boom to the 1995 internet revolution, predicting a significant impact on the tech industry with substantial investor participation and transformative growth.

Inflation Stress Rises

Retail traders are increasingly stressed by inflation and skeptical of Federal Reserve rate cuts, according to a Charles Schwab sentiment survey. Bullish sentiment on U.S. stocks fell to 46% in the second quarter, while 79% view cryptocurrencies as risky investments.

Ethereum ETFs Approved

The Security Exchange Commission approved the first step on the path to spot Ethereum ETH/USD exchange-traded funds, paving the way for increased mainstream and institutional investment in the second most valuable cryptocurrency. The approval reflects growing regulatory acceptance of cryptocurrencies, potentially leading to capital inflows from mainstream investors.

Crypto In Politics

Cathie Wood‘s prediction that cryptocurrency will be a significant issue in the 2024 White House race is proving accurate. As young voters increasingly favor candidates supporting crypto, politicians are adjusting their stances.

Meme Stocks Decline

Interest in meme stocks like GameStop and AMC Entertainment Holdings Inc. AMC has waned following Roaring Kitty’s exit from social media. Investors on Reddit's WallStreetBets forum are now focusing on other stocks, including Nvidia, Tesla Inc. TSLA and Nikola Corp. NKLA.

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Image generated using artificial intelligence via Midjourney.