Feeds

Qualcomm leads NASDAQ to unprecedented heights

Does the biggest boom since 1928 foreshadow the biggest bust since 1929?

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

The Nasdaq composite index closed above 4,000 points yesterday, only months after amazing analysts by breaking 3,000. This is the result of unprecedented investor optimism over technology stocks, many of which have risen by more than 500 percent this year alone.

By far the largest winner is Qualcomm, whose shares rose $97 to $756 in London this morning, after gaining $156 in New York yesterday. The company's shares are up a spectacular 2,400 percent this year.

Other technology stocks have gained monumentally this year too. Yahoo, Intuit, i2, CMGI and Broadvision have all doubled in the past two months, during the period when the NASDAQ rose from 3,000 to over 4,000. The NASDAQ has risen proportionally more this year than any American index in history.

This is especially surprising when one considers that the majority of issues driving the index have been expanding ahead of profits, and have seen their share values outstripping earnings by a hefty margin. Their high value is purely a function of earnings expectations; while the expectations are purely the product of widespread optimism regarding the Internet's potential to serve one day as some colossal engine of global wealth.

The party can go on indefinitely so long as everyone remains convinced that the Internet is all it's cracked up to be; but if the vast wealth it is supposed to create turns out a disappointment, there will eventually have to be a realistic assessment of the value of companies whose fortunes are tied to it. There is a limit to the faith one can place in a company that produces no real profits. In times of economic stress, one is far more likely to hold shares in a company that creates actual wealth rather than creating the mere expectation of wealth.

To us it all seems a bit mad, really; but since The Register's fortunes are as much tied to the Internet as anyone else's, we can't help wishing that the rest of the world would turn a blind eye to the pitfalls and risks, and join us in a toast to future earnings based on a whole lot of investors declining to ask any very difficult questions. Cheers! ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Forget silly privacy worries - help biometrics firms make MILLIONS
Beancounter reckons dabs-scanning tech is the next big moneypit
Microsoft's Office Delve wants work to be more like being on Facebook
Office Graph, social features for Office 365 going public
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.