Tech stocks still rule.
For much of Thursday, it looked as if a trio of drug stocks—
Amgen
(ticker: AMGN),
Eli Lilly
(LLY), and
Regeneron Pharmaceuticals
(REGN)—would edge out tech companies to lead August’s gains in the
Dow Jones Industrial Average,
the
S&P 50
0, and the
Nasdaq 100.
But when the regular session closed for the final session of the month, tech companies held all three top positions.
The Dow ended the month down 2.4%, while the
S&P 500
fell 1.8% and the Nasdaq 100 declined 1.6%.
Leading the Dow.
Cisco Systems
(CSCO), a big provider of networking equipment was the strongest performer in the Dow with an August gain of 10.2%, its best monthly run since October. The company reported better quarterly earnings and revenue than expected on Aug. 16, although management’s outlook for fiscal 2024 wasn’t as upbeat as Wall Street had expected.
CEO Chuck Robbins said on a call to discuss the results that product orders in the quarter were up by 30% sequentially, with double-digit increases in all customer markets. Robbins said that was above historical order trends of 18% to 20% sequential order growth.
CFO Scott Herren said in an interview with Barron’s that AI-related business will meaningfully show up in the company’s financial results by the end of fiscal 2024. “There are encouraging signs in AI,” Herren said at the time. “We see a multi-year opportunity ahead, and we are well positioned to win in that space.”
Starring in the S&P 500.
Arista Networks
(ANET) took the top position in the S&P 500 with a gain of 25.9%, the networking equipment company’s hottest stretch since November 2020.
Arista makes networking hardware for data centers—
Microsoft
(MSFT) and
Meta Platforms
(META) are among its biggest customers—so it stands to benefit as companies spend to bulk up in artificial intelligence. The stock had sold off in late July on concern about a potential slowdown in data-center infrastructure demand and signs of moderating spending from Microsoft and Meta.
But at the end of the month, the company reported better-than-expected results, triggering a surge in the share price as August began.
Nasdaq 100’s top stock:
Atlassian
(TEAM) led the market benchmark with a surge of 12.2%, its biggest monthly gain since May. The cloud-based seller of productivity software reported higher earnings and revenue than Wall Street had expected.
Chief Financial Officer Joe Binz expressed optimism about the cloud segment on a call to discuss the results. The company expects growth will gradually improve as customers increasingly transition from data centers to its cloud offering. The comments contrasted favorably with the company’s tone in May, when
Atlassian
referred to uncertainty about customers’ spending as a concern for the cloud business.
Write to Angela Palumbo at [email protected]
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