Dear traders, dear stock market friends.
The Nasdaq 100 has staged a brilliant comeback in the last two weeks. In the past trading week, positive quarterly results from tech giants such as Microsoft and Meta, among others, led to a further improvement in sentiment and a further rise in share prices. The Nasdaq 100 was up 3.45% on the previous week and has already gained more than 20% since its low on April 7. The strong and rapid recovery certainly came as much of a surprise to many market participants as the previous price slump.
Positive quarterly figures provide tailwind
The reporting season has reached its peak in the last few days. Many of the Magnificent 7 stocks published their quarterly results last week, which were eagerly awaited.
Microsoft share price explodes after earnings announcement
Microsoft once again presented very strong results on Wednesday evening after the close of trading: With a turnover of 70.1 billion US dollars and earnings per share of 3.46 US dollars, forecasts were clearly beaten. The Azure cloud division in particular showed impressive momentum with revenue growth of 33 percent. Microsoft 365 also benefited from the growing interest in AI applications such as Copilot, which led to higher revenue per user. The gaming segment performed solidly, while the devices segment stagnated.
Microsoft's share price already rose significantly in after-hours trading and was up more than 11% on a weekly basis.
Meta Platforms continues to invest heavily in AI
Meta Platforms also published earnings on Wednesday evening and was also able to impress. Revenue rose to USD 42.32 billion in the first quarter and earnings per share of USD 6.43 were well above expectations. The advertising business - Meta's core area - once again posted double-digit growth, supported by the successful monetization of reels and returns from former TikTok advertising customers. At the same time, Meta is investing heavily in AI infrastructure and has increased its investment budget to up to USD 72 billion. This is causing mixed reactions on the market, as high expenditure on the one hand and the loss-making Metaverse project Reality Labs on the other raise questions about long-term profitability. However, the share reacted positively and gained 9.1 percent on a weekly basis.
Apple: Breakout postponed
Apple only slightly exceeded analysts' estimates on Thursday evening. Quarterly sales amounted to 95.4 billion US dollars, with earnings per share of 1.65 US dollars. While iPhone sales stagnated, Apple's Services division was able to shine with a record figure of 26.6 billion US dollars, thus providing stability. Nevertheless, a cautious outlook dampened the euphoria: management referred to negative currency effects and the threat of import duties amounting to around 900 million US dollars, which unsettled investors.
Apple shares opened with a moderate down-gap on Friday, but stabilized over the course of the day.
Amazon beats expectations
In addition to Apple, Amazon's earnings were also on the agenda on Thursday evening. Amazon shares already showed strength on Thursday and more or less stood still on Friday. However, the figures presented were quite strong with sales of USD 155.7 billion and earnings per share of USD 1.59 - both above expectations. The cloud division AWS grew by 17 percent, but fell slightly short of analysts' expectations. On the other hand, the advertising business and Prime integration in e-commerce stood out positively. However, Amazon issued a cautious outlook for the coming quarter, citing rising logistics costs and potential risks due to the trade dispute.
US labor market remains robust
Another important event that was the focus of attention last week and created a positive mood was the labor market report (Non Farm Payrolls) published on Friday, which significantly exceeded market expectations: 177,000 new jobs were created in April, while analysts had only expected around 138,000 on average. The unemployment rate remained at 4.2 %, which is close to the cyclical low. This continues the trend of a robust but moderately cooling labor market that has been observed for months.
On the markets, the combination of solid job momentum and moderate wage growth provided relief: the yield on 10-year US Treasuries briefly rose to 4.28 % as the probability of a Fed rate cut in June fell from 58 % to 40 %. At the same time, S&P 500 and Nasdaq 100 futures climbed by around 0.9 %, adding to the positive news flow from the tech reporting season. For the Nasdaq 100, the robust labor market means a tailwind for the time being as economic concerns recede into the background, while the prospect of a continued data-driven Fed makes interest rates - and thus the valuation models for high-growth tech stocks - more predictable.
Nasdaq 100: Technical outlook
As you can see on the following daily chart, the Nasdaq 100 has risen significantly in the last two weeks and is now back above the daily EMA-200 and just below the daily SMA-200 at 20,103 points. As the index is overbought in the short term and is directly in front of a resistance area, a correction in the coming days would be a logical consequence. However, due to the extremely strong performance of the last few days, the strength of the market breadth, the strong earnings season and the resolution of the trade dispute, the chances of further gains in the coming weeks are good. If the Nasdaq 100 manages to break above the resistance at 20,200 - 20,300 points, the technical picture would also brighten considerably and clear the way to the old all-time highs at 22,200 points.
Author: Tobias Schmid
Date: 05.05.2025
