Two to Tango: Indian IT Meets Nasdaq?

Historical Relationship between Nifty IT and NASDAQ

The outperformance of NASDAQ is not broad-based and is primarily led by a few companies that are dominant in new emerging technologies and are leading the wave. Indian IT companies and many other traditional IT companies will see a temporary slowdown till the time they do the catching up either organically or inorganically 

The U.S. equity market continues to stand out as one of the top-performing equity markets globally. The S&P 500, a key indicator of U.S. market performance, has surged by 10.35 per cent year-to-date (YTD). This remarkable performance can be attributed, in large part, to the impressive showing of technology stocks. Among these, a select group—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla—have particularly stood out, collectively posting a staggering 21 per cent average increase since the start of this year. 

This exceptional growth far exceeds the performance of the other 493 companies in the S&P 500. These seven stocks have come to be known as the ‘Magnificent Seven’, a term coined in 2023 by Bank of America analyst Michael Hartnett, borrowing from the 1960s ensemble Western movie of the same name. Apart from being among the most valuable companies in the stock market, these companies are at the forefront of secular technology growth trends, including artificial intelligence, cloud computing, online gaming, and cutting-edge hardware and software.