Up 156 percent!: Tech stocks skyrocket – here’s why

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Many stock market professionals were mistaken in assessing the development in the tech sector: they had hoped that the heyday of tech stocks would end for a while after the peaks at the end of 2021. But since the beginning of the year, numerous tech stocks such as Netflix, Tesla, Meta and Alphabet have largely caught on, and their value has risen again in the past few days.

Shares in the Netflix streaming service rose 52.7 percent to $441.9 since the start of the year. In June 2022, the stock fell below $175 after falling more than 70 percent. Interest rate hikes by central banks hit especially technology stocks hard. Cheap money had previously greatly increased growth stocks. Netflix also had increased competition and declining subscriber numbers.

Tesla shares go full throttle

In the USA, interest rate increases are now coming to an end. This increases the financing of projects for technology companies. And the stock market is now enthusiastically accepting small reports of success in tech stocks. Netflix has grown again this year. Plus, the streaming service can expect additional revenue, thanks to an ad-funded subscription and countermeasures against account sharing.

Shares of electric car maker Tesla are up 128.4 percent since the start of the year and are currently trading at $281.4. The company managed to increase its sales with significant price cuts this year. Still, Tesla achieves significantly higher margins than its competitors. At Tesla, experts often disagree over whether the group should be rated as an automaker or a tech group. Most analysts – in UBS or JPMorgan, for example – currently expect the stock to lose significant value.

AI and layoffs as drivers

Shares of Google’s parent company Alphabet are also up 42.2 percent since the start of the year. Facebook parent company Meta increased even more clearly: plus 156.7 percent. First of all, the high expectations in the development and implementation of artificial intelligence are effective here.

However, tech stocks have also benefited from the layoffs of tens of thousands of employees in recent months: companies are increasingly focusing on making a profit.

Source :Blick