The Nasdaq Composite (^IXIC +0.33%) has been a force to be reckoned with lately. The index has finished at all-time record levels in six out of the past seven trading sessions, including Friday's bounce from a rare setback on Thursday. With the roughly 0.5% move higher on Friday, the Nasdaq is now up nearly 9% in August and a whopping 70% since its March lows.
Unquestionably, the performance of standout stocks like Apple (AAPL +0.79%) and Tesla (TSLA +0.33%) has played a key role in driving the Nasdaq upward. As of the end of Friday's session, the stock splits that Apple and Tesla announced took effect. Starting Monday, the two stocks will trade on a post-split basis. With that catalyst now behind two of the most influential stocks in the Nasdaq, the question some have is whether the index will keep its forward momentum and keep climbing to record levels.
Passing the baton
Friday's market action provided at least a short-term answer to that question. Neither Apple nor Tesla made any contribution to the Nasdaq's gains today. Apple was down a tiny fraction of a percentage point. Tesla gave up more than 1% on the day, falling back from its own record-setting run recently.
Image source: Getty Images.
The strongest contributor among top Nasdaq stocks Friday was NVIDIA (NVDA 0.61%), which picked up 4%. The semiconductor chip industry did fairly well across the board on the day, reflecting extremely strong demand for microprocessors and other chips due to soaring PC demand. The drive toward remote work has led to a resurgence of desktop and laptop computer purchases. That's adding to the pressure from companies purchasing data servers and other chip-containing hardware to facilitate their cloud computing transformations.
Plenty of catalysts for gains
In addition, the Nasdaq's rise has come largely under the shadow of uncertainty about the future direction of the coronavirus pandemic. Many companies have found ways to prosper during the outbreak, while others have sought to minimize the damage and are looking forward to better conditions once a vaccine or more effective treatment becomes available.
Indeed, both Apple and Tesla have their opportunities to cash in on an improving macroeconomic environment when it comes. For Apple, the pandemic hasn't prevented it from showing the value of its mobile devices and wearables, and customers have come to rely more on certain services that the company has added to its ecosystem lately. If things get back to normal quickly, then any economic recession would likely be shorter than it would be otherwise, and that could bring greater sales just in time for the holiday season.
Tesla's ambitions are equally aggressive. New models are coming out, and Tesla will have the opportunity to show off its battery technology in just a few weeks from now. That's already ignited a lot of excitement about the company. If the reality makes it even clearer that Tesla isn't just an automaker, then it could result in another wave higher for the stock.
Plenty of room for new records
Trying to time a market high is always a fruitless effort. Even with stock splits from Apple and Tesla soon to be behind us, there'll inevitably be other news to move markets. If it's good, then there could be many more record highs ahead for the Nasdaq Composite.
