“It seems like a rotation on a lot of different levels,” Convergex Nick Colas told CNBC. “It’s a bigger issue [because]it looks like big cap tech is kind of becoming yesterday’s news.”
Facebook will report results on Wednesday, April 27. Market observers, though, expect the social media company to announce improved ad revenue, especially from its mobile advertising platform.
“While there have been a lot of chatter and speculation back and forth in recent weeks about ad trends and how they impacted this Facebook quarter, all the news this week pointed toward positive results,” TheStreet‘s Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust portfolio, and Jack Mohr, research director, said in a note.
Market cap-weighted tech sector ETFs have a large weighting in the two companies. For example, QQQ has a 11.4% tilt toward AAPL and 4.9% in FB. XLK holds 14.1% AAPL and 6.1% in FB.