The stock market is closing at record highs, even as the economy struggles to recover from the effects of the Coronavirus Pandemic. The NASDAQ Composite Index hit an all-time high on Wednesday, closing at 10,020.35 points. Apple and Microsoft Tech stocks are driving the growth, with some producing better results than others.
Two of the most powerful growth stocks on the market, now have capitalizations close to $1.5 trillion. Let’s take a look at the details and see what’s driving this unprecedented growth.
Technology Stocks Driving Growth in the Stock Market
The familiar growth stocks are at the top of this week’s market rally. Microsoft, Apple, Facebook, and Amazon are outperforming their market peers.
When the market closed on Wednesday:
- Apple Inc. (NASDAQ: AAPL) was up 2.57%, taking it to a market cap of $1.49 trillion.
- Microsoft Corp. (NASDAQ: MSFT) was up 3.71%, taking it to a market cap of $1.44 trillion.
- com Inc. (NASDAQ: AMZN) was up 1.79%, taking it to a market cap of $1.3 trillion.
- Facebook Inc. (NASDAQ: FB) was down -0.81%, but is still up 2.85% over five days, taking it to a market cap of $680 billion.
The market value of these companies is now close to $5 trillion, making it the most valuable group of publicly-traded companies in the world.
Why Are These Stocks Rallying During the Pandemic?
Large technology stocks have performed better than other stocks during the Coronavirus Pandemic. These companies have limited exposure to general consumer trends, making them highly resilient to the economic downturn.
The prevalence and importance of the cloud have helped Microsoft and Amazon in particular. These companies are the two largest cloud providers in the world. Decentralized computer systems have helped businesses to stay operational during the health crisis. Both companies saw a huge demand for cloud services over the last three months.
Even with lockdown orders in place, all these companies can still do business. Apple is the most exposed because it operates a large physical retail network, but its online sales platform has helped to pick up where it lost out in foot traffic. Microsoft, Amazon, and Facebook are all digital-focused companies, so they can continue to serve their customers even when stay at home orders are enacted.
Investors are confident that even if there’s a second wave of Coronavirus infections, all four of these companies will continue to generate strong fiscal performance.
Apple and Microsoft Are Strong Portfolio Picks?
Any of these stocks can fit into a well-diversified portfolio. Microsoft is arguably the strongest choice, due to its affordable price, reliable dividend, and historical growth.
The stock market might not reflect the actual state of the economy, but these large tech stocks show that investors are still optimistic about a rebound and strong growth opportunities.
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