Big tech companies have been the focus of Wall Street for much of 2024, but can they continue to perform as well as they have so far this year?
Ken Mahoney, president of Mahoney Asset Management, appears on Wealth! to share his insights on the tech sector and which of the Mag 7 stocks investors should be watching.
“I always think about the big three. Apple (AAPL) just passed $3.5 trillion in market cap a few days ago. Microsoft (MSFT) did it for the first time, and Nvidia is now third. So I think I’m looking at a weighted average, a weighted index. And by the way, when people are talking about small caps and international stocks, the reason we’re still here is because there’s so much liquidity in these stocks because of payroll taxes and money coming out of 401(k) plans and 403(B) plans, and a lot of money is flowing into the weighted average. So, as you say, I think Microsoft, Apple and Nvidia have to put up good numbers for this to continue,” Mahoney says.
For more expert insights and the latest market trends, click here to watch this full episode of Wealth.
This post was written by Nicholas Giacobino
Video Transcript
How much of this quarter’s revenue will come back to NVIDIA, and how long will this positive momentum continue to impress on the market?
So I think it was all about revenue projections.
I’ve always thought that.
How are you now?
We’re hitting record highs for eight days in a row, nine days in a row, and when you read the headlines, you see the political cycle, the geopolitical cycle, all the issues that feed into revenue, and it makes you want to keep growing your revenue.
And after March 31st of the first quarter of this year, it was clear that revenues needed to catch up, and analysts were competing with each other.
Moving from Buy to Strong Buy.
I go from neutral to buy with 140 target to 170 target.
And that’s what we’ve been seeing for the last few weeks, because tomorrow was going to be a bunch of big earnings reports from technology companies and banks.
But if you actually look at it, it’s actually a revenue estimate.
Now, after all, there’s a lot of noise in the headlines.
The stock is really going to do well with the tailwind of earnings, which analysts keep trying to keep up with but can’t seem to keep up with tech earnings due to the capital expenditures to date.
What other stocks besides NVIDIA could dominate this earnings season?
Look, I always think about the big three, and now Apple is valued at over $3.5 trillion.
The story continues
Oh, just a few days ago.
The first company to do that was Microsoft, and now NVIDIA is the third.
So, I would look at a weighted average, a weighted index.
This is what people mean when they talk about small caps or international stocks, by the way.
No, the reason we’re still here is because, you know, there’s so much liquidity in these stocks because of the money coming out of payroll taxes and 41 K plans and 43 B plans, and then a lot of money flows into the weighted average plans.
So, as you say, I think Microsoft, Apple and NVIDIA are going to have to put up good numbers to keep this going.
These big tech companies that are heavily weighted in the SP 500, such as Amazon, Google, and Donner Blitzen Comedy, all also have heavy weights in the NASDAQ.
We need to see these companies beat and raise their guidance and start that cycle again.
Analysts are catching up.
