As we near the year's end, the technology sector is concluding on an impressive note, having recently reached new all-time highs. The tech sector has taken the lead throughout the year, outpacing the broader market significantly.
It's been a year underscored not by a singular catalyst but by many impactful events: the ascendance of Artificial Intelligence (AI), persistent geopolitical tensions, interest rates, and the Federal Reserve's battle against inflation.
Through it all, the tech sector's exceptional dominance over the year shouldn't come as a shock. The Invesco QQQ ETF NASDAQ: QQQ has notably surged nearly 55% year-to-date, sharply outpacing the SPDR S&P 500 ETF Trust NYSE: SPY, which has risen by 24%. It's evident in the continuous breakout of many tech stocks from their consolidations, demonstrating robust follow-through momentum toward higher values.
And while the end of the year is just around the corner, three high-flying industry leaders are shaping up for further upside. Let's look closer at three tech stocks that look set to add to their already impressive year-to-date gains.
Three tech stocks on the verge of a breakout
Microsoft, the world's largest software company, is renowned for Windows, Azure cloud services, LinkedIn, Office suite, and Xbox gaming. In 2023, its acquisition of Activision Blizzard and innovative AI developments with OpenAI garnered significant attention.
Microsoft has had a stellar year. The technology and software giant has just edged out the rest of the sector year-to-date, up almost 56% year-to-date and last trading within 3% of its all-time high. In its most recent quarterly report on October 24, 2023, Microsoft exceeded earnings expectations by reporting $2.99 per share, surpassing the estimated $2.65 by $0.34. The company earned $56.52 billion during the quarter compared to analysts' predictions of $54.52 billion. Over the past year, Microsoft has generated $10.33 in earnings per share and currently holds a price-to-earnings ratio of 36.21.
Despite its remarkable performance during the year, both fundamentally and technically, the stock might have juice left. The stock is currently trading in a tight range between $370 and $376, with the latter acting as critical resistance. If it can push above resistance with authority, a move over $380 toward its all-time high is likely the outcome.
Uber is a multinational ride-hailing company that operates a mobile app connecting users with transportation services such as ridesharing, food delivery, and micro-mobility options like electric bikes and scooters. Established in 2009, Uber has expanded globally, revolutionizing how people commute and access transportation services through its convenient and user-friendly platform.
Notably, Uber is one of the most upgraded and top-rated stocks, with analysts rating the stock a Buy. Year-to-date, the stock has impressed and vastly outperformed, up 150%. And the good news for shareholders is that it appears the stock isn't done for the year.
The stock has spent several weeks consolidating at recent highs, with $63.50 acting as resistance and $61.50 as support. Last trading near $63.20, the stock looks set to break above its recent high and begin a fresh leg higher into the new year.
Upstart Holdings is a lending platform in the United States that employs AI technology to make credit decisions. It offers loans for various purposes, leveraging advanced algorithms to assess creditworthiness beyond traditional factors.
Upstart has significant bearish sentiment surrounding its stock, with analysts forecasting over 44% of downside and shorts piling into the name, which now has a massive 43.66% short interest. However, the stock has soared to the upside, up over 250% year-to-date, perhaps making analysts and the shorts question their thesis.
From a technical analysis point of view, the stock looks set to continue higher. Over the previous two weeks, it has consolidated over $45 and key moving averages, with $47 - $49 acting as resistance. Should the stock push above this resistance zone and firmly hold, a move over $50 could easily result in further upside and a potential squeeze.
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