Tech stocks have rocketed to all-time highs in January. And the strong earnings report we just saw from Netflix (NFLX) suggests they’ll soar to even higher highs in February. 

In part, that’s because the recent rally in tech stocks has been fueled by the realization that corporate earnings should be really strong this year. 

Plus, the data suggests that the economy – which many thought was on the verge of a recession – is actually on the mend right now.

Together, these bullish developments should help propel stocks higher over the coming weeks and months.

Netflix Earnings Say a Rally’s In the Forecast

According to retail sales results, consumer spending broke records this past holiday season. That’s important because consumer spending drives 70% of the U.S. economy. Since consumers have increased their spending recently, the economy is picking up steam, too. And they likely won’t stop spending anytime soon, either.

That’s because wage growth has outpaced inflation for several months now. And that’s allowing consumers to rebuild their savings, giving them more real purchasing power. Perhaps that’s why the University of Michigan’s January consumer sentiment index jumped to its highest levels since the summer of 2021. Not to mention, consumer inflation expectations have also dropped to their lowest levels since the pandemic emerged. 

With wage growth outpacing inflation, consumer sentiment spiking, and inflation expectations plunging, the stage is set for continued strength in consumer spending trends in 2024.

At the same time, the world’s largest chipmaker – Taiwan Semiconductor (TSM) – said last week that 2024 will be a great year for the semiconductor industry thanks to burgeoning demand for AI chips. 

And last night, Netflix reported its biggest quarterly subscriber growth in years. It added more than 13 million subscribers last quarter, smashing consensus estimates. 

These bullish developments bode exceptionally well for the stock market.

The Final Word

Folks, the economy is back. 

I know, I know – that’s not what the media headlines are saying. 

But I’m not ruled by headlines. I listen to the data. And the data is screaming that the economy is on the mend. 

That means fourth-quarter corporate earnings should be very strong. 

Over the next month or so, companies across the world will report their results for the final three months of 2023 and deliver their outlooks for 2024. 

The data suggests that those numbers will be quite good – and that the outlooks could be even better. 

If so, then this red-hot tech rally is about to get even hotter. 

That’s why, just this morning, we executed a few new trades to play this rally. 

We think these tech stocks are particularly well-positioned to soar this earnings season. 

Find out what we’re buying right now.

_{On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.}

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