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NEW YORK (AP) -- Big technology companies provided the energy for most of broader market's sharp ascent in 2023 and their latest financial reports so far justify that confidence from investors.
Microsoft and Google's parent company Alphabet reported strong profit growth that beat analysts' forecasts. Chipmaker Intel surprised Wall Street with a profit during its most recent quarter. ServiceNow, which makes software that automates technology operations, reported a surge in profit.
Tech's propping up of the market had raised concerns that the gains could be on somewhat shaky ground if companies couldn't deliver actual results. A big part of the S&P 500 breaking free of a bear market in 2023, despite lingering concerns about a recession, was due mainly to a runup in various tech stocks.
"In a nutshell, Big Tech earnings have been a flex the muscles moment for the bulls," said Daniel Ives, a senior equity research analyst at Wedbush, in a research report.
He said artificial intelligence advancements will be a key reason for tech stocks to keep rising this year. The information technology and communications sectors are each up more than 40% this year already.
"We continue to strongly believe a new tech bull market has started this year," Ives wrote.
Microsoft is up more than 40% this year and its size gives it more influence on the broad S&P 500 index, which is up more than 20% in 2023. More importantly, many big tech companies have been giving Wall Street positive signals that there is more growth ahead with the development and integration of artificial intelligence and cloud computing in technology with broad uses.