What happened
Shares of Meta Platforms (META 0.23%), Amazon (AMZN +1.43%), and Nvidia (NVDA +0.14%) were all making gains this morning as investors continued their cautious optimism in tech stocks that began last month.
As a result, Meta stock gained 2.3%, Amazon climbed 1.2%, and Nvidia rose 2% as of 12:45 p.m. ET.
So what
Investors dipped their toes back into tech stocks last month following a months-long exodus from the sector. The tech-heavy Nasdaq Composite is down 20% year to date as investors have processed the news of skyrocketing inflation, Federal Reserve interest rate hikes, and fears that the economy could end up in a recession.
Image source: Getty Images.
But last month some investors started regaining at least a little confidence in tech stocks again as they likely thought that most of the economic concerns and inflation woes are already baked into companies' stock price drops.
As a result, the Nasdaq Composite popped 12% last month. Amazon and Nvidia benefited from the tech stock surge last month, as they gained 27% and 19%, respectively. And it appears that investors are continuing that sentiment for tech stocks today, helping to drive Meta, Amazon, and Nvidia higher today.
NASDAQ: META
Key Data Points
Now what
What's interesting about some of these stocks' share price gains today is that, in some cases, recent company news hasn't been all that great.
For example, Meta reported its second-quarter results last week in which revenue fell on a year-over-year basis for the first time ever. The company's sales and earnings also missed analysts' consensus estimates.
But investors may be focusing on the positives right now and instead looking at Amazon's second-quarter revenue growth that beat Wall Street's average estimate and even factoring in Apple's better-than-expected second-quarter results that were reported last week.
Additionally, Nvidia investors pushed the stock higher last week after the U.S. Senate passed the CHIPS for America Act, which will provide subsidies and tax credits for some semiconductor companies.
NASDAQ: NVDA
Key Data Points
While it's still unclear how much Nvidia will directly benefit from it, the bill could be a boon to the broader chip industry -- with about $50 billion set aside for chip companies. Nvidia investors seized on the fact that the U.S. chip industry as a whole could benefit and pushed the company's share price up more than 9% last week.
While Meta, Amazon, and Nvidia investors are no doubt pleased with the recent share price gains of these stocks, they should also understand that there's likely some more volatility ahead for the tech sector.
With more Federal Reserve interest rate hikes potentially on the way and inflation still at a 40-year high, these stocks could reverse some of the gains they've made recently.
Additionally, Nvidia will report its second-quarter financial results on Aug. 24 and investors will want to keep a close eye on any changes in consumer spending that might affect the company's gaming graphics processing unit sales, as well as any potential decline in the company's important data center sales segment.
