The Nasdaq index is one of the three biggest indices in the United States. It is known for the big technology companies that make it. These include the biggest companies like Apple, Amazon, and Microsoft. YTD, the best-performing company in the index is Mercadolibre, which has gained by 68%. It is followed by Ctrip and Advanced Micro Devices (AMD), which have gained by more than 50%.
Yesterday, the index rose by a few basis points. This happened in part because of the impressive economic data from the United States. It was also in part because of the Initial Public Offerings (IPOs) that happened yesterday.
Pinterest was the first company to go public. The company provides a digital pinboard, where people from all around the world can post pictures and make purchases. It is used by more than 200 million people every month. After becoming a public company, the stock rose by more than 25%, valuing the company at more than $12 billion.
Zoom was the next company to go public. The company provides videoconferencing platforms for companies from around the world. It was founded in 2011. As a public company, the stock price gained by 72%, giving it a market valuation of more than $15 billion. In recent years, investors have preferred enterprise technology companies like Twilio, Salesforce, Zendesk, and Apptio. This is because many companies are moving to adopt the technologies offered by these companies.
In the near future, investors will welcome other unicorns to the public market. Some of the companies that are expected to go public soon are Uber and Palantir Technologies.
Still, all has not been well for the IPO market. A few weeks ago, Lyft went public, with its stock price gaining by more than 20%. Since then, the stock has declined sharply as investors question the business model.
This year, the Nasdaq index has gained by more than 15%, fueled by a number of factors such as the anticipated IPOs. It has also gained because of the hopes of a trade deal and the relatively strong earnings by American tech companies. Yesterday, the index ended the day at $7712, which is close to the YTD high of $7733. On the chart below, this price is above the 21-day and 42-day moving averages. The RSI has gained to above 60 while the signal line of the MACD indicator has moved higher. When the market opens on Monday, the index is likely to continue moving higher.