Amazon Leads Rebound in Battered Tech as Traders Reload on Risk
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The market is regaining its appetite for risk after a bitter 2022 as traders increasingly snap up some of last year’s biggest losers, particularly beaten-down tech stocks.
and were among the biggest contributors to the 4.5% gain the week ending Jan. 13. Amazon, which tumbled 50% last year amid soaring interest rates and slowing revenue growth, rose 14% for its best week since April 2020, while graphics chipmaker Nvidia also gained 14% over the last five sessions.
Amazon.com Inc. ranks No. 19 on the Transport Topics Top 100 list of the largest private carriers in North America.
Investors are becoming more optimistic that inflation will continue to cool, which would allow the to soon pause interest rate hikes that triggered a valuation reckoning last year for growth stocks. The December consumer price index released Jan. 12 was the lowest in a year, adding to growing evidence that the Fed is starting to tame inflation even as central bankers insist there’s more work to be done.
“This is the market saying that it is more optimistic that things are better off than periods of last year, when recession narratives were dominating,” said Nick Getaz, portfolio manager for the . “We’re not out of the woods, but maybe we can see the clearing of the trees.”
Evidence of rising optimism wasn’t limited to the biggest U.S. tech companies. A basket of unprofitable technology stocks tracked by jumped 15% for the week ending Jan. 13. Software maker surged more than 20%, electric vehicle maker jumped 28% and , the beaten-down auto retailer, soared 59%.
Of course, not all tech stocks have outperformed this week. , and have all lagged behind the .
Getaz is skeptical that the rally can be sustained considering threats to economic growth and the likelihood that interest rates remain elevated. He’s looking forward to the fourth-quarter earnings season that commenced this week to see if corporate profit estimates can hold up.
“It’s fair to say it is too early for the level of uplift we’ve seen,” he said. “There’s more evidence for why you should be optimistic, but I’m not sure there’s enough evidence to warrant this level of strength.”
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