USTech100

The Santa rally in tech stocks is already here, with the composite index of more than 3,000 stocks listed on the U.S. Nasdaq stock exchange outpacing the Dow Jones industrials since the beginning of December. It scored a historically record closing high at nearly 19,404 this Monday and managed to set the next intraday peak above 19,450 today. A data set since 1928 shows December as the best performing month of the year, with broad market barometers of Wall Street rising 74% of the time, yet this tendency is even more clear In presidential election years, when December provided gains 83% of the time. What also sounds pretty good is that statistically the strength in December usually extends into January. The only thing, which is typical for such presidential election years, is that the closing month is often characterised with an increased accent on activity during the first ten trading sessions but could be somewhat weaker before the ending days. It's easy to conclude that a reasonably hurried type of the pickup strategy for leading tech giants looks to be an appropriate response to fresh challenges. It is always better to buy still relatively cheaper and then hold longer than to try to chase rising prices later following the bullish trend.

Indeed, some market caps record holders are now setting the tone to give an aerodynamic shape to the quickening move up. Shares of Apple (APPL) has a winning streak consisting of seven consecutive days, so that a previously lagging iPhone-maker climbed onto its newfound top levels well above $240. Microsoft (MSFT) added almost 5% in its market value in a similar seven-day trip, with more than enough space to drive it further upstairs, keeping in mind a still existing discount for the stock compared to its all-time record pricing of July. Meta Platforms (META), which is the owner of Facebook, Instagram and WhatsApp, climbed by more than 5% for the last two days on growing advertising monetization hopes to touch an uncharted territory above $605 per share, while an average 12-month price target by the analyst community is located at $649, but we feel it could easily be achieved long before the end of this winter, if not before Christmas. A second wave of positive response to Q3 quarterly reports released by Amazon (AMZN) and Google (GOOG) in November could also be mentioned in the first page of Wall Street's record book of 2024. Actually, the whole market just creeps higher, but the list of the mentioned tech giants is now the first priority in our concept of how to earn on stocks, as we are seeking for a better risk/profit ratio.

Wedbush analysts are citing positive catalysts including deregulation under Donald Trump’s second term and the “AI revolution" helped by a "$1 trillion+ of incremental AI cap-ex over the next 3 years” as a proper base for 20% or more surge in the tech sector in 2025. In a client's note, Wedbush emphasized that AI initiatives are going to emerge from the Trump administration, so that it could be "substantially" favourable for major tech companies such as Microsoft (MSFT), Amazon (AMZN) and Google (GOOG), with the Department of Defence and other federal agencies "playing a pivotal role" in boosting AI development, positively impacting "companies like Palantir (PLTR) and Oracle (ORCL)". “While the Inflation Reduction Act would see some major changes/revisions under a Trump Administration which would be a negative for Intel (INTC) and others, the focus on AI will be front and center in our view and benefit Big Tech,” the group of analysts said, adding that the potential departure of Lina Khan from the Federal Trade Commission (FTC) is "seen as another positive development for the tech industry" to catalyse more deal flow and remove a significant barrier that has challenged tech sector deals, "including the recent broader investigation into Microsoft (MSFT)".

Again, according to Wedbush, Tesla's (TSLA) "unmatched scale and scope" will give it a "distinct competitive edge" in a non-subsidy EV market after the removal of tax incentives and rebates, while higher tariffs on China imports will "hinder" Chinese EV manufacturers from entering the American market, further benefiting Tesla (TSLA). Moreover, accelerating some of Tesla's (TSLA) full self-drive initiatives are expected once Trump is in the White House. As Tesla (TSLA) maybe looks a bit overbought right at the moment, its futures prospect for the second half of 2025 seem to us very promising.