The Financial Express

Tech groups power US stock market rally

| Updated: October 23, 2017 01:21:35

tech groups power us stock market rally


 Big, rapidly growing technology groups have powered this year’s US stock market rally, with investors increasingly enamoured by the likes of Facebook, Amazon, Apple, Netflix and Google, which have between them gained between 27 and 34 per cent this year and helped lift the S&P 500 to numerous records lately, according to a global media report Saturday.

Most of the Faang stocks were softer on Friday, but the S&P 500 was heading towards a record close by midday in New York, partly thanks to another jump by Nvidia, a California-based chipmaker that is moving from supplying the computer gaming sector to self-driving cars and the broader, emerging “ internet of things” industry.

Nvidia is now trading at 47 times its forecasted earnings over the next four quarters, but the valuation is justified despite the “parabolic rise” of its shares, given under ownership by US mutual funds, it’s early lead in artificial intelligence andautonomous driving opportunities, BofA analysts said. 

The chipmaker is now valued at just shy of $100bn, making the case for ejecting Netflix from the Faang club in its favour much stronger. While Netflix shares are up 33 per cent this year, the TV on demand company is valued at a more modest $71bn, making it comfortably the smallest company of the five widely followed stocks that make up the acronym.

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