Tech stocks wrap up strongest three-week rally since early days of Covid in April 2020

Tech investors are marching towards Thanksgiving with plenty of holiday cheer.

The Nasdaq rose 2.4% this week, bringing its three-week gains to 12%. It’s the strongest rally over that amount of time since April 2020, when early Covid stay-at-home requirements led to a surge in e-commerce and cloud software stocks.

Intel was the biggest winner among large-cap tech stops this week, climbing 13%. Shares of the chipmaker are now up 35% since Oct. 26, when the company reported better-than-expected profit and sales, bolstered by stronger demand for PCs.

Analysts at Mizuho Securities lifted their rating on Intel to buy from neutral this week, citing a renewed emphasis on the company’s data center business and an encouraging customer pipeline, which could drive up “share gains and improve margins.”

Semiconductors will be the primary area of focus next week for tech investors, as Nvidia is scheduled to report results on Tuesday. The stock has jumped 22% in the past three weeks, bringing its gains for the year to 237%, far surpassing all other members of the S&P 500.

Nvidia has been the biggest beneficiary of the boom in generative artificial intelligence, providing the graphics processing units (GPUs) to handle the powerful workload requirements. In its earnings report next week, the company is expected to show revenue growth of over 170% for the third quarter, and for the fourth quarter analysts are expecting Nvidia’s forecast to suggest growth of close to 200%, according to LSEG, formerly known as Refinitiv.

“Obviously all eyes are going to be on next week, when they’re coming out with earnings,” said Eric Jackson, EMJ Capital founder, in an interview on CNBC’s “Closing Bell” on Thursday.

Jackson, who calls Nvidia his “top large-cap name,” sees the market in the early days of a rebound, tied to an end to Federal Reserve rate hikes. The central bank’s benchmark borrowing rate is targeted in a range between 5.25%-5.5%, the highest in 22 years, and projections show the beginning of cuts in May and a full percentage point drop by the end of 2024, according to the CME Group’s FedWatch gauge.

The tech sector tends to be one of the most sensitive when it comes to interest rates, because low borrowing costs encourage risk, while higher rates push investors into assets deemed safer.

The broader market got a boost this week from tame U.S. inflation data. The Consumer Price Index (CPI), was flat in October from a month earlier, while economists polled by Dow Jones expected a gain of 0.1%. The numbers fueled further optimism that the Fed’s rate-hiking campaign is over.

Following Intel, Tesla was the next-biggest large-cap gainer this week, with shares of the electric vehicle company climbing 9.2%. Investors shrugged off comments by CEO Elon Musk, who said on his social media site X that he agreed with a post accusing “Jewish communities” of pushing “hatred against whites.”

Regarding Musk’s post, White House spokesman Andrew Bates said in a statement that, “We condemn this abhorrent promotion of Antisemitic and racist hate in the strongest terms, which runs against our core values as Americans.”

WATCH: EMJ’s Erick Jackson expects good earnings report from Nvidia