Earnings estimates for mega-cap tech stocks have risen despite weakness in the overall market as the Nasdaq 100 Stock Index ($IUXX) (QQQ) dropped to a 3-1/2 month low last Wednesday. Over the past three months, analyst 2024 earnings projections for mega-cap technology stocks, such as Amazon.com (AMZN) and Meta Platforms (META), have risen by more than +10%, according to Bloomberg data. Also, 2024 earnings estimates for Alphabet (GOOGL) have risen 8%, and earnings estimates for Nvidia (NVDA) have soared 69%.
A hawkish Fed helped push the 10-year T-note yield to a 16-year high last week, which weighed on technology stocks. The fear is that the Fed’s intention to keep interest rates higher for longer to curb inflation could knock the economy into recession and fuel a slide in high-valuation technology stocks. Zevenbergen Capital Investments LLC believes the recent drop in mega-cap tech stock prices has reduced valuations enough to make the stocks attractive, saying, “We believe these stocks can outgrow the broader economy.”
