Nasdaq 100 forecast: Tech stocks continue to thrive amid AI optimism

Nasdaq 100 forecast remains bullish amid rising AI investments and strong earnings
Trump’s AI initiative boosts tech stocks despite ongoing trade tensions
Technical analysis remains bullish, with key levels in focus as index futures dip slightly

The Nasdaq 100 forecast remains bullish for now. Sentiment is positive mainly because the technology sector is continuing to remain the gift that keeps on giving. The latest wave of optimism has been fuelled by advancements in artificial intelligence and solid corporate earnings. While US index futures slipped into the red during early London trade, European markets remained upbeat, hinting at a resilient sentiment. President Trump’s announcement of a $500 billion investment in AI infrastructure, including the "Stargate" project with OpenAI, Oracle, and Softbank, has been the centrepiece of this momentum, pushing the S&P 500 to new all-time highs yesterday. For now, valuation concerns and rising debt levels have been pushed to the backburner.

Tech rally propels Nasdaq near record highs

Trump’s massive AI spending commitment has driven megacap tech stocks higher, countering the cautious tone set by his protectionist trade policies. Despite the lingering threat of tariffs on Europe and China, investors seem focused on the growth potential offered by this ambitious investment. The Nasdaq’s trajectory suggests the possibility of new all-time highs, even as market participants weigh the impact of Trump’s comments on tariffs targeting regions like Mexico and Canada.

This “buy-the-dip” mentality remains strong, with traders balancing optimism from growth initiatives against risks from potential trade disputes. Trump’s moderated tariff proposals, including a 10% levy on Chinese goods, offer some relief compared to the 60% rate discussed during his campaign.

What’s on the Radar Today?

Today’s key focus will be the weekly US jobless claims data and Trump’s speech at the World Economic Forum in Davos. Additionally, Q4 earnings reports from General Electric, American Airlines, and Texas Instruments will garner some attention.

Strong performances from Netflix and Oracle are also noteworthy. Netflix surged yesterday after surpassing Q4 expectations, reporting 19 million new subscribers and revenue of $10.25 billion. Similarly, Oracle’s inclusion in Trump’s AI investment plan boosted its shares, reflecting investor confidence in its future growth.

Technical Nasdaq 100 forecast: key levels to watch

The Nasdaq’s technical outlook remains positive. Following Trump’s inauguration speech, the index broke out of a falling wedge continuation pattern and surpassed a couple of key resistance levels and moved back above the 21-day exponential moving average, providing an ambiguous bullish signal.

Source: TradingView.com

The slightly slight loss of momentum on the Nasdaq and S&P 500 chart can be explained away by profit-taking, as the bulls will have all the benefit of the doubt for now. Key support levels to watch include 21,630/35 and 21,300 - these are critical for buy-the-dip traders.

The 21,630/35 area marks the prior resistance zone and the highs from Monday and Tuesday’s ranges. The 21,300 level is where the backside of the broken resistance trend of the falling wedge comes into focus.

On the upside, some of the bullish objectives to watch, include 21865, marking recent highs, with 22,133—December’s all-time high—serving as the primary bullish target.

Until a bearish reversal emerges, shorting the index remains off the table for us. For now, the Nasdaq 100 forecast remains bright, with AI-driven optimism leading the charge.

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

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