Nasdaq Index: AMD and Micron Fuel Bullish Mid-Session Forecast

AI Stocks Keep Running and the Shorts Keep Feeding the Rally

U.S. stocks are heading for weekly gains at midday Friday and the Nasdaq is leading. Advanced Micro Devices crossed $700 billion in market cap this week and the semiconductor rally is not showing any signs of stopping. The shorts are getting run over and the trend traders are collecting.

Technical Outlook

The Nasdaq Composite (IXIC) is trading at another all-time high on Friday and the current upside momentum suggests buyers aren’t likely to stop until the close.

The new minor range is 24913.12 to 26156.39. Its pivot at 25534.76 is the nearest support. Additional pivot price support is 25324.11 and 25177.70.

Swing bottom support is spread across 24913.12, 24491.83 and 24199.00.

I’ve mentioned several times before that I’m not interested in trying to pick a top, I’m a trend trader. Social media is becoming saturated with traders saying this market is overextended and due for a crash. So not only are they skilled at picking a top, but they can also predict crashes too. It’s the conventional RSI analyst out there calling the index overbought and selling or shorting that is feeding the rally.

As a trend trader, I tend to believe that tops are formed when the buying stops and investors decide to book profits and move aside. I don’t believe that tops are formed by short-sellers. It’s the weak short-sellers that are getting eaten alive by the aggressive buying.

In studying the Nasdaq Composite rally, one thing that jumps out to me is the lack of two-day breaks. Since the March 31 bottom at 20690.25, I’ve only seen about five one-day pullbacks. This means that the buying is strong with investors aggressively taking out offers instead of passively waiting for dips.

I don’t recommend trying to pick a top, but if you need a sign to justify taking profits or even playing the short side, wait for the confirmation of a closing price reversal top or a change in the pattern. The thing is, it may take some patience because even after a high price is reached, it may take days or weeks to form a top. Remember the crash of 1987, after the August 25 top, it took about 39 market days before it crashed on October 19.

AMD Crosses $700 Billion, Micron Catches the Same Bid

Advanced Micro Devices hit $713 billion in market cap Friday morning and the stock is up 20% this week alone. Nearly 90% over the past month. First quarter earnings came in at $1.37 per share against estimates of $1.29. Revenue hit $10.25 billion versus the $9.9 billion forecast. That is not a modest beat. That is a company telling the market that AI chip demand is real and accelerating and investors are pricing it in session by session.

Micron Technology is catching the same bid. High-bandwidth memory chips are becoming the critical component inside AI systems and data centers and Micron is one of the names positioned directly in that path. The broader semiconductor rally stayed intact Friday and nothing in the session gave traders a reason to step back.

The Earnings Winners

Akamai Technologies jumped more than 25% after announcing a $1.8 billion cloud infrastructure deal tied to AI services. IREN Limited climbed after unveiling an AI infrastructure partnership with Nvidia. JFrog rallied after raising its earnings outlook and Rocket Lab gained on strong revenue growth and new contract announcements. Texas Roadhouse moved higher on better than expected earnings and strong same-store sales. Wendy’s gained after topping revenue forecasts and announcing aggressive expansion plans in China over the next decade.

The Earnings Losers

CoreWeave dropped after second quarter revenue guidance came in below expectations. Trade Desk sold off hard on weak guidance that raised questions about advertising growth. Cloudflare fell after announcing workforce reductions and Upwork dropped on a restructuring plan that includes major job cuts. Coinbase traded lower after a surprise quarterly loss and weaker transaction revenue. When the winners are jumping 20% and the losers are dropping 13%, the market is separating fast. AI exposure is the line between the two columns right now.

The Backdrop That Put Nasdaq at All-Time Highs

April payrolls came in at 177,000 against an estimate of 138,000. That is not a soft landing number. That is an economy that is not breaking and traders read it immediately. Rate cut expectations shifted, yields moved, and instead of selling the news the market bought it. A strong jobs number on a day when AI earnings are beating across the board is not a setup that produces sellers.

The earnings picture this season has been cleaner than most expected. Technology companies are not just beating estimates. They are raising guidance and signing billion dollar infrastructure deals in the same report. That combination tells traders the AI spending cycle is not slowing down. It is getting larger. AMD, Akamai and IREN all confirmed it this week from three different angles. That is not a coincidence. That is a theme.

More Information in our Economic Calendar.