The technology sector has been viewed in recent months as one that will lead the way out of the recession. The performance of tech exchange traded funds (ETFs) and the sentiment of analysts puts an exclamation point on the sentiment.

Dr. Ed Yardeni of Yardeni Research believes that sectors and industries that outperformed and underperformed the market during the first year of the bull market will do so again for this year, writes Josh Lipton for Minyanville. Yardeni says that tech will come out ahead this year and “industry analysts are raising both their 2010 and 2011 estimates as the sector continues to deliver more positive earnings surprises than the other sectors.” [Tech ETFs: A Way to Avoid the Guesswork.]

The tech sector’s top performers have some things in common, such as companies that have big global footprints and strong, clean balance sheets. Additionally, valuations look attractive, tech companies are continuing to put up record revenue numbers and capital expenditure may begin to increase.

Cisco Systems (NASDAQ: CSCO) climbed ahead of news on how the company could help telecommunications companies boost Internet speed to meet growing demand, reports Peter A. McKay for The Wall Street Journal. The news also lifted telecom stocks.

The majority consensus on Wall Street is that a second round of recession isn’t likely, but participants remain skeptical about whether new bets on the markets are justified, considering the strength of the recovery. The Nasdaq is up 83% since the March 9 low of last year.

For more information on the technology sector, visit our technology category.

  • PowerShares QQQ (NASDAQ: QQQQ)
  • First Trust NASDAQ-100-Tech Index (NASDAQ: QTEC)
  • iShares Dow Jones US Technology (NYSEArca: IYW)
  • Technology Select Sector SPDR (NYSEArca: XLK)

If you would rather have leveraged tech investments take a look at these. But just know the risks and how they work – leverage isn’t for everyone. [All About Leveraged and Inverse ETFs.]

  • Direxion Daily Technology Bull 3X Shares (NYSEArca: TYH)
  • Ultra Technology ProShares (NYSEArca: ROM)

For full disclosure, Tom Lydon’s clients own shares of QQQQ.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.