Nasdaq notches five-week streak: Longest since November 2021

At Nasdaq just wrapped up the fifth straight week of earnings, jumping 3.3% over the last five days. This is the longest weekly winning streak for the tech-heavy index since a stretch that ended in November 2021. Coming off its worst year since 2008, the Nasdaq is up 15% to start 2023.

At the end of this long rally in tech stocks, investors are ready for the electric car maker Rivian A blockbuster IPO, the US economy closed its strongest year for growth since 1984, and the Nasdaq traded at a record high.

This time, there was less champagne. Cost-cutting has replaced growth on Wall Street’s checklist, and tech executives are being celebrated for the efficiency of innovation. The IPO market is dead. Layoffs abound.

Earnings reports are the story of the week, with results from many of the world’s most valuable technology companies. But the numbers, for the most part, aren’t good.

Apple missed the forecast for the first time since 2016, Facebook parents Meta recorded a third quarter of revenue declines, Google‘s core advertising business is shrinking, and Amazon closed the weakest year for growth in its 25-year history as a public company.

While investors had mixed reactions to individual reports, all four stocks closed the week with solid gains, as they did Microsoftwhich reported earnings the previous week and issued weak guidance on its forecast for revenue growth this quarter of only about 3%.

Meta was the best performer among the group this week, with the stock up 23%, its third best week. In Wednesday’s earnings report, revenue came in slightly above estimates, even with sales down year-over-year, and first-quarter forecasts were roughly in line with expectations.

Key to the rally was CEO Mark Zuckerberg’s statement in his earnings statement that 2023 will be the “Year of Efficiency” and his promise that “we are focused on becoming a stronger and more agile organization.”

“This is really a game-changer,” Stephanie Link, chief investment strategist at Hightower Advisors, said in an interview Monday with CNBC’s “Squawk Box.”

“Quarter itself is OK, but cost-cutting finally they ask for religion, and that’s why I Meta really took it off,” he said.

Zuckerberg acknowledged that times have changed. From the year of the IPO in 2012 to 2021, the company grew between 22% and 58% annually. But in 2022, revenue fell 1%, and analysts expect growth of just 5% in 2023, according to Refinitiv.

On the earnings call, Zuckerberg said he doesn’t expect the decline to continue, “but I also don’t think it’s going to come back like it was before.” Meta announced in November it was cutting 11,000 jobs, or 13% of its workforce.

Link said the reason Meta stock got a big bounce after earnings is because “expectations are too low and the valuation is too low.” The stock has lost nearly two-thirds of its value in the past year, more than its mega-cap peers.

Apple, which fell 27% last year, gained 6.2% this week despite reporting its biggest drop in revenue in seven years. CEO Tim Cook said results were impacted by the strong dollar, production issues in China affecting the iPhone 14 Pro and iPhone 14 Pro Max, and the overall macroeconomic environment.

“Apple is navigating what is, of course, a very difficult environment overall,” Dan Flax, an analyst at Neuberger Berman, told “Squawk Box” on Friday. “When we move through the months and quarters come, we will see a return to growth and the market will begin to discount. We continue like the name even in the face of this macro challenge.”

Amazon CEO Andy Jassy, ​​who will succeed Jeff Bezos in mid-2021, took the unusual step of joining analysts on Thursday after his company issued a weaker-than-expected forecast for the first quarter. In January, Amazon began layoffs, which are expected to result in the loss of more than 18,000 jobs.

“Because this last quarter was the end of my first full year in this role and given some unusual parts of the economy and our business, I thought it might be a good time to join,” Jassy said on the phone.

Managing costs has been a big theme for Amazon, which has grown rapidly during the pandemic and has since admitted that it has hired more people during that time.

“We work hard to keep costs down,” Jassy said.

Alphabet is also in downsizing mode. The company announced last month that it was cutting 12,000 jobs. The revenue loss for the fourth quarter included disappointing sales at YouTube from a pullback in ad spending and weakness in the cloud division as the business tightened its belt.

Ruth Porat, Alphabet’s chief financial officer, told CNBC’s Deirdre Bosa that the company is meaning to slow down hiring in an effort to generate long-term profitable growth.

Alphabet shares ended the week up 5.4% even after giving up some of the gains during the sell-off. The stock is now up 19% for the year.

If the Nasdaq continues its upward trend and posts a sixth weekly gain, it will match its longest rally since the stretch that ended in January 2020, before the Covid pandemic hit the US.

Investors will now turn to earnings reports from smaller companies. Some of the names we’ll be hearing next week include Pinterest, Robinhood, Emphasize and Cloudflare.

Another area in technology that is growing this week is the semiconductor space. As with consumer technology companies, there isn’t much growth to attract Wall Street.

AMD on Tuesday beat sales and profit but guided analysts to a 10% year-over-year revenue decline for the current quarter. Intel, AMD’s main competitor, reported a disastrous quarter last week and forecast a 40% drop in sales in the March quarter.

Still, AMD jumped 14% for the week and Intel jumped nearly 8%. Texas Instruments and Nvidia well notched good results.

The semiconductor industry is dealing with a lot of extra parts in PC and server makers and lower prices for components such as memory and central processors. But after a miserable year in 2022, stocks have rebounded on signs that the Federal Reserve’s rate hikes are on the rise and low inflation figures will give the company a boost later this year.

WATCH: Watch CNBC’s full interview with Truist’s Youssef Squali