These 3 Giants Could Keep the Stock Market Rally Going in 2021

Stocks had a largely quiet day on Thursday, with major market benchmarks trading on either side of the unchanged mark as investors paused after a huge rally to begin the year. By the end of the day, the Dow Jones Industrial Average (^DJI 0.56%) had fallen back below its record-setting closing level from Wednesday. But the S&P 500 (^GSPC -0.88%) and Nasdaq Composite (^IXIC -2.05%) managed to post gains that took them further into uncharted territory.

Data source: Yahoo! Finance.

Momentum strategies have worked extraordinarily well over the past year, and investors still seem to be quite happy with what they're familiar with. Market leadership has come from the technology sector for a long time, and today, gains in Apple (AAPL -1.22%), NVIDIA (NVDA -10.01%), and Intel (INTC -2.40%) played the biggest role in pushing the Nasdaq higher and keeping stocks at or near record levels.

Apple stays healthy

Shares of Apple were higher by nearly 4% on Thursday, stretching its market-leading market capitalization to $2.3 trillion. The tech giant has more than doubled since last March and shows no signs of slowing down.

There's always some news surrounding Apple, and today was no exception. Stock analysts had a number of positive things to say, including that the company's first line of 5G-enabled smartphones appears to be selling well and that its planned foray into the electric vehicle arena might best be accomplished through a partnership rather than through in-house production. Morgan Stanley made a small price-target boost of $8 to $152 per share, and reports of a virtual reality headset stoked interest in Apple.

Image source: Getty Images.

Many investors are increasingly worried about the pace of Apple's ascent. The iPhone maker has managed to outpace most of its large technology stock rivals even as revenue growth has slowed considerably. Without fundamental business growth, they argue, Apple could easily give up its gains.

There will therefore be a lot on the line next week when Apple reports its earnings. At that time, investors will get a better sense of whether the iPhone 12 is doing as well as hoped. Disappointment could send the stock lower, but further good news would leave Apple with more room to rise.

A good day for semiconductor stocks

Elsewhere, NVIDIA shares climbed nearly 5%, while Intel had a 6% boost. Strong sentiment in the semiconductor space helped lift these giants of the industry.

Intel's rise was a bit odd in that it came after a premature release of its fourth-quarter earnings results mere minutes before the end of trading. The chipmaker reported sales that were down 1% from year-ago levels but crushed the company's previous guidance. Earnings per share similarly were better than expected, coming in flat on an adjusted basis. Intel also gave encouraging guidance for the first quarter of 2021. Investors have high hopes that new CEO Pat Gelsinger will accomplish what his predecessor hasn't in fully restoring Intel to its former glory.

Yet gains for NVIDIA and other semiconductor stocks show that investors are generally enthusiastic about the entire tech industry. With strong demand for electronic devices, chipmakers can be assured of consistent order activity. Even though NVIDIA, Intel, and others are fighting for supremacy, there's enough of an appetite for semiconductors right now that every company can thrive.

Tech can keep climbing

As long as people want the most up-to-date electronic devices available, there'll be room for Apple and semiconductor stocks to keep rising. Valuation concerns are justified, but it's impossible to predict when markets might decide to correct from their recent bull run. Until then, these three stocks could be instrumental in continuing to push the market higher in 2021.