Technology-sector exchange traded funds (ETFs) were poised to rally again Thursday after Apple (NasdaqGS: AAPL) earnings creamed analyst forecasts as the company’s quarterly profit nearly doubled.
Analysts said Apple’s impressive beat was driven by strong sales of iPhones and Mac computers, while gross margin was also solid.
“Further, Apple does not expect to be materially impacted by the Japanese earthquake,” Deutsche Bank said in a research note.
“For the stock, we believe that the recent underperformance, owing to concerns about the quarter, will be reversed,” added BMO Capital Markets.
“With sentiment relief post the quarter, we believe Apple can capture both higher estimates and multiple expansion to make up for material multiple compression over the past few months,” BMO analysts said. “Investors can now look to new product launches in the fall and the iPad ramping as catalysts.”
Apple shares rose 4% in premarket action Thursday.
The stock was set to boost technology ETFs including PowerShares QQQ (NasdaqGM: QQQ), which has more than 20% in Apple, although its weighting will decline as a result of an upcoming rebalance of the tracking index, the Nasdaq-100.
PowerShares QQQ rallied more than 2% on Wednesday following upbeat earnings from tech companies including Intel (NasdaqGS: INTC). The Nasdaq Composite Index enjoyed its best day in six months while the Dow Jones Industrial Average rose to a recovery high.