Nasdaq100 (US100) futures are trading up nearly 0.15% today, and yesterday, after the U.S. session gained quite a bit, accelerating to new historic highs. The psychological barrier of 20,000 points is getting closer and closer, and bulls have a clear appetite for U.S. stocks; especially those related to artificial intelligence. Yesterday's higher inflation forecasts for 2024 and Powell's comments were not taken as a 'warning' by investors. Wall Street is still fully pricing in two rate cuts, this year (November, December) and giving about a 70% chance of easing in September.
- The hero of the last few sessions has been Apple (AAPL.US), whose shares were supported by comments on the integration of OpenAI solutions in new products, which may translate into hardware upgrades and purchases of the company's 'fresh' devices. In turn, the 'hero' of yesterday's session was semiconductor manufacturer Broadcom (AVGO.US), whose shares are trading up nearly 15% today ahead of Wall Street's opening. The nearly 5% weighting in the Nasdaq index, brought a rise in the overall benchmark.
- The company reported that its revenue rose 43% year-on-year, thanks to higher interest in its chip offerings targeting AI solutions, and raised its full-year profit guidance from $50 billion to $51 billion today. Although artificial intelligence accounts for only a fraction of the company's total sales and profits, the stock market greeted the news with great optimism, as did the prospect of a 10:1 stock split.
- Although AI sales are still only a small percentage of Broadcom's business, the market is looking to the future with clear optimism, and perhaps expects that, like Nvidia's data centre segment, Broadcom's chips now account for a few percent of sales, but a year from now - with little competition - these figures could be in the double digits.
With demand in the AI market outstripping supply, Broadcom is likely to increase sales of AI chips and similarly, or on a larger scale, before AMD (AMD.US) rivals Nvidia in it. Investors are eager to believe in the promising future and upward momentum of the largest, technology companies. Broadcom's results alone, however, beat expectations by a relatively small margin. The company also reported $2.2 billion in net income in the latest quarter, down significantly from $3.48 billion in the same quarter last year. Earnings per share were $4.42 vs. $8.15 a year earlier. The market, however, 'picked up' on the improvement of the AI segment and focused attention on it.
US100 (H1 interval)
Although selling volumes on the way out of the last correction (April) were relatively high, buyers are keeping up the pace. The main psychological resistance remains around 20,000 points. Important support is provided by the 19,000 - 19,100 points level, supported by previous price reactions and the 23.6 Fibonacci retracement of the April upward wave.
Source: xStation5
