How Long Can High Tech Stocks Revel After Star Company'S Share Price Has Reached New 20 Years?

The disturbance of new crown pneumonia is not over, especially at a time when the epidemic situation in the United States has not been effectively controlled, and the technology stocks of US stocks are still rising all the way. On August 17 local time, among the three major US stock indexes, the NASDAQ index, which has a higher proportion of technology shares, closed at a historical high. As of the 17th, the NASDAQ index has risen more than 24% this year.

The performance of semiconductor stocks is also brilliant. As of the 17th, the Philadelphia Semiconductor Index (SOx) has recorded a 20% increase this year. In recent years, shares of a group of star semiconductor companies such as NVIDIA, AMD and Qualcomm have reached historical highs.

Other tech stocks were even more aggressive. As of the 17th, Facebook, Netflix and alphabet, the parent company of Google, have increased by 27%, 49% and 13.53% respectively this year, while Apple has increased by 56%, with a market value of nearly $2 trillion. In the fields related to e-commerce, Amazon increased by more than 72%, and the stock price of overstock, an online shopping and brand discount platform, increased by more than 1600% in the year.

However, some interviewees pointed out that the reason why US stock technology stocks continue to record new highs is also related to the Fed's "water release" (quantitative easing), but from a global perspective, the impact of the new crown pneumonia epidemic is far from over. Especially for the semiconductor industry, in the first half of the year, downstream enterprises in the industrial chain avoid possible risks by increasing inventory, which makes some enterprises perform relatively well in the first half of the year. In addition, the rise in the share prices of some star companies also has specific background and reasons. However, as the epidemic continues, it remains to be seen whether the good performance of the first half of the year can be extended in the third and fourth quarters.

On August 18, local time, the three major U.S. stock indexes opened slightly higher, and then rose and fell. As of 35 minutes after the opening, the Dow was down 0.12%, the Nasdaq was up 0.41%, and the S & P 500 was up 0.16%. The S & P 500 index broke the record of 3393.52. The NASDAQ and the S & P 500 are expected to break through record closing highs during the trading day.

In terms of technology stocks, Amazon, Google and Netflix rose 3.55%, 1.21% and 1.43% respectively, apple and Facebook fell 0.05% and 0.26%; Philadelphia Semiconductor Index fell 0.24%, Intel and Qualcomm rose 0.38% and 0.04%, NVIDIA and AMD fell 0.74% and 0.83% respectively.

The new crown epidemic has not yet subsided, while the U.S. stocks of technology stocks are still rising. Visual China

The share price of star company has reached a new high in nearly 20 years

Among a large number of technology stocks, NVIDIA stock has undoubtedly become the favorite of wall street again. The company's market value exceeded $300 billion on the 17th, after no semiconductor company had been able to rise to that level since the Internet bubble burst in late 2000. In addition, NVIDIA will release its second quarter results on the 19th local time after Wall Street analysts from Wells Fargo, Oppenheimer, Susquehanna and wedbush have raised their target prices.

In an online interview in mid May, NVIDIA CEO Huang Renxun told media reporters including the 21st century economic report that the new crown pneumonia epidemic had indeed affected its business in China to a certain extent; however, at the same time, the surge in global scientific research demand, the growth of infrastructure investment in data centers driven by cloud computing, and the game industry brought about by alienation measures during the epidemic Business growth, as well as the growth of notebook computer business driven by telecommuting, has "fortunately" been positively affected.

Games, workstations and data centers are the core businesses of NVIDIA. However, the revenue proportion of NVIDIA's related businesses is not high in the fields of automobile and aviation, which are declining due to the impact of the epidemic.

At the same time, NVIDIA is also concerned about the acquisition of arm. Although it has been reported that many companies, including apple and Samsung, intend to acquire, at present, only NVIDIA has a strong interest.

Yao Jiayang, a consulting analyst with Jibang, pointed out to the reporter of 21st century economic report that the advantage of purchasing arm is that it can first confirm the development blueprint and specification details of arm's IP solutions such as CPU and GPU, so that the buyer can have a more in-depth layout ahead of other competitors in the future product development, and may even be at least half a year ahead.

5g "Dongfeng" under the share price of Qualcomm also in the recent rapid rise. In regular trading on August 17, the company's shares fell 1.37% to $112.18. Prior to that, Qualcomm released a strong third quarter report after U.S. stock market on July 29, and said it had reached a new patent licensing agreement with Huawei, which would pay a one-time "back up payment" of about $1.8 billion. Qualcomm's shares surged 14% in after hours trading, breaking $106 - the last time it hit $100 was before the Internet bubble burst in 2000.

However, many vice president of the U.S. Federal Reserve's "good performance in the first half of the year" is related to the good performance of the US Federal Reserve, but it is also related to the performance of Linghai. In addition, there are some specific backgrounds and reasons that stimulate their stock prices to rise.

For example, in addition to the patent licensing agreement with Huawei, Qualcomm has recently consolidated its core business model, the U.S. Court of Appeals for the Ninth Circuit, which recently overturned an antitrust lawsuit filed by the district court against Qualcomm.

Can the rally continue?

Sheng Linghai told the 21st century economic reporter in an interview that the global semiconductor industry has not yet come out of the impact of the new crown pneumonia epidemic. In the first half of the year, the whole semiconductor industry was "in a good situation", somewhat "unexpected". He analyzed that part of the reason is that affected by the epidemic situation and Sino US trade friction, a large number of downstream companies in the industrial chain have adopted the strategy of active stock preparation to raise the inventory level and resist possible risks.

"So we can see that the demand in the first half of the year is still good." "But the problem is that in the second half of the year, the epidemic is not over, and due to the impact of Sino US trade frictions, such as Huawei's new ban, the whole demand will be affected to a certain extent," he said

On August 17, the Bureau of industry and security (BIS) of the U.S. Department of Commerce issued a revised ban on Huawei, further restricting Huawei's use of U.S. technology and software products, and included 38 Huawei subsidiaries in the entity list. Wilbur Ross, the US Secretary of Commerce, clearly states that the use of software is prohibited in an interview with the U.S. Commerce Secretary.

The U.S. Department of Commerce added several rules to the latest ban, including that products based on U.S. software and technology cannot be used to manufacture or develop any parts, components or equipment produced, purchased or ordered by Huawei subsidiaries in the list of entities.

"After the new sanctions policy, can we continue to do business with Huawei? Will other companies have any ideas? It's hard to say Sheng Linghai said that whether the semiconductor industry in the second half of the year will be due to excessive inventory and sluggish demand, still need to be observed.

He pointed out that the performance of many semiconductor companies in the second half of the year "is not easy to say.". However, some enterprises may further increase the stock preparation and inventory level to cope with the potential impact of Sino US trade friction and protect the production bases in China from risks.

However, according to Hong Hao, managing director of BOCOM international and head of research department, "hoarding" may not be the main reason for the good performance of semiconductor companies in the first half of 2020. "It's gone after a quarter or two, but it's been shipping a lot." He pointed out to the reporter of the 21st century economic report that since the second half of 2019, the year-on-year growth of semiconductor shipment has been strong, rather than in 2020 or even after the spread of the epidemic. Hong Hao believes that the driving force of 5g and other factors and the "hoarding" of some Chinese enterprises may have a certain impact on this.

In addition, Hong Hao believes that the treatment of "technology stocks" and "semiconductor stocks" can not be generalized. From the perspective of science and technology stocks as a whole, the profits of relevant technology companies have not been affected during the epidemic period, but may be more "fierce" than before the outbreak. In addition, the impact of the epidemic on some small competitors has also helped the profits of large technology companies. "There was nothing to buy during the outbreak, and money went to companies in these technology related sectors." He said, "so here's what we're seeing."

But there are also concerns that the carnival will end in a bubble. Wall Street, as well as the unprecedented rapid rise in the stock market, has attracted many investors. Once investors calm down, they will question whether the potential of technology companies in the future matches the high stock prices, and the stocks will start to return to the real level or even collapse. Some U.S. economists believe that unless cyclical sectors such as banking, energy and health care can take over the baton from the tech sector, the risk of tech stocks breaking up, as it did in 2000, will increase.