Nasdaq Index is generating significant gains for investors after a slow start to the year. Big tech stocks are contributing to the heavy tech index bull run by enticing investors with their innovations and substantial revenue growth stories.
The index has notched a new all-time high of 7800 points this week. The market pundits, however, are seeing further upside for the Nasdaq index; they believe fundamental factors fully backs the rally.
Though trade war tensions keep investors on their toes, gains from Netflix (NASDAQ:NFLX) and Facebook (NASDAQ:FB) allowed Nasdaq index to trade at the highest level in history.
Netflix shares grew almost 100% since the start of this year to a new all-time high of $404. The media giant generated share price gains of 165% in the last twelve months, and it is up 300% over the last three years.
Goldman Sachs issued a price target of $490 for Netflix shares and reiterated its ‘Buy’ rating, saying “its cash flow generation will turn positive in the following years.” The company continues optimizing trader’s sentiments through significant growth in revenues.
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In the first quarter of this year, Netflix reported a revenue growth of 43% since last year. The net streaming additions stood at a new record level of 7.41M in the first quarter, higher than the prediction of 6.32M.
Facebook shares, on the other hand, are also trading at the highest level in history. FB shares have crossed the $200 mark for the first time after a rally of 28% in the last twelve months. Its Instagram unit achieved 1B monthly active users during the second quarter. The company has also launched a long-form video hub—IGTV—which enhances its potential to capture teenage eyeballs that have shifted consumption from television to online creators.
Besides these two stocks, the majority of other tech companies such as chip makers and semiconductors companies are also adding significantly to Nasdaq index.
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