The technology sector, along with related exchange traded funds (ETFs), plowed through the economic recovery with force. Tech companies are showing strong fundamentals and investors who were dramatized by the last tech bust shouldn’t be too cautious of this new tech sector boom.
According to James Brumley from Investopedia, the technology sector had the second-most upside earnings surprises last quarter, with 88.7% of its large-cap stocks showing upside surprises, boasts the lowest projected 5-year PEG ratio of 1.1 versus the market average of 1.4 and experienced the greatest revenue growth of 8.8% year-over-year last quarter, as stated in iStockAnalyst. [Why Tech ETFs May Be Leading the Way.]
Brumley observes that investors who were burned during the tech bust in the last decade are now overly cautious on the sector. He also adds that the next cycle could lead to excessive and even dangerously high confidence in the tech sector again.
Tech shares dipped on Monday trading after reports that Google would reduce its Web presence in China, according to ONN.tv. China and Google have been in heated talks over censorship in search results on the Web search engine. Google is continuing talks with China, but advertisers are already being advised by industry insiders to switch to rival companies.