Tech stocks staged a comeback on Friday with Apple Inc. and Microsoft Corp. among the biggest gainers this week after reporting strong quarterly results and outlooks.

Apple shares surged 7 per cent on Friday, their biggest one-day gain since July 2020 after its results beat expectations and demonstrated the company’s ability to navigate a difficult supply environment. Microsoft gave a strong forecast earlier in the week, buoying investor sentiment on its cloud growth prospects.

For the week, Apple climbed 4.9 per cent while Microsoft added 4.1 per cent, putting them among the top 10 best performers on the Nasdaq 100 Index. The tech-heavy benchmark gained 3.2 per cent on Friday, its biggest one-day percentage gain since March, helping it post a weekly gain of 0.1 per cent.

Despite the positive session, tech stocks have been under pressure this year amid persistent concerns over inflation and a more hawkish Federal Reserve, which has hinted at several rate hikes this year.

Investors remain focused on the prospect of higher rates and the impact that may have on multiples. 

“The Fed is just starting to get in the way of the market because there’s still a lot of uncertainty about how it will play its hand going forward,” George Mateyo, chief investment officer at Key Private Bank, said in an interview. He expects further volatility ahead.

SOFTWARE JUMPS

Another bright spot for tech was software firms. Atlassian Corp. surged 13 per cent this week, making it the top stock on the Nasdaq 100 after it reported second-quarter results that beat expectations and gave a third-quarter revenue forecast that was ahead of analyst projections. ServiceNow Inc. added almost 11 per cent this week after subscription sales jumped 30 per cent, topping the average analyst forecast.

Chipmakers were one group of tech firms that took a pronounced hit this week after earnings disappointed. Despite rising 1.8 per cent on Friday, the Philadelphia Stock Exchange Semiconductor Index fell 3.8 per cent this week, and it posted its biggest one-day drop since March on Thursday. This came after Intel Corp. gave a disappointing profit forecast, fueling a slump in its shares. Lam Research Corp.’s outlook also trailed analyst estimates due to supply-chain constraints.

Earnings will remain a focus next week, when more marquee firms like Amazon.com Inc., Alphabet Inc., and Meta Platforms Inc. are among the names reporting.