The Nasdaq-100 soared over 50% in 2023 and could be poised for more gains in the new year. So traders may want to continue keeping tech-focused ETFs on their radar for bullish plays in 2024.
For big tech to flourish again, operational improvements are needed, according to a Motley Fool article by Neil Patel. The strength tech saw during the height of the pandemic needs to be supplanted with efficiencies that can help improve the bottom line, including key cost-cutting.
“The hope is that these strategic moves will result in expanding margins and higher profitability,” the article said. “As we look toward 2024, improving bottom lines among tech companies may be a huge boon for share prices.”
Of course, the Federal Reserve will play a key role in tech’s strength. And the reduction of interest rates should also help reduce borrowing costs. Increased valuations should also prove favorable to big tech if the operational improvements and macroeconomic environment of lower rates provide enough tailwinds.
“Looking to 2024, there is still meaningful upside from a purely valuation perspective,” the article added. “This is especially the case if what was previously mentioned, like margin improvements and favorable economic conditions, become more pronounced.”
Bullish ETFs to Trade Tech
If there’s enough bullishness to go around, traders have myriad opportunities in big tech regarding leveraged ETFs to maximize profits. For an all-inclusive approach, they can consider the Direxion Daily Technology Bull 3X ETF (TECL). The fund seeks daily investment results equal to 300% of the daily performance of the Technology Select Sector Index.
Artificial intelligence could have another big year. And that should benefit the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF (UBOT). The ETF seeks daily investment results that equal to 200% of the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index.
Strength in AI could also spill over into semiconductors. That area is necessary to power AI applications. With that, traders can look at the Direxion Daily Semiconductor Bull 3X ETF (SOXL). It seeks daily investment results equal to 300% of the daily performance of the PHLX Semiconductor Sector Index.
In addition, traders can use leverage to take advantage of bullishness in individual stock names that play in the big tech arena. Direxion Investments offers traders single-stock ETFs in the following companies:
- Direxion Daily NVDA Bear 1X Shares (NVDD)
- Direxion Daily GOOGL Bull 1.5X Shares (GGLL)
- Direxion Daily AAPL Bull 1.5X (AAPU)
- Direxion Daily AMZN Bull 1.5X Shares (AMZU)
- Direxion Daily MSFT Bull 1.5X Shares (MSFU)
For more news, information, and analysis, visit the Leveraged & Inverse Channel.
