Widely followed technology exchange traded funds (ETFs) such as the Technology Select Sector SPDR (NYSEArca: XLK) and broad market ETFs like the PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100 Index, have faced a variety of headwinds this year, but there are signs the group is perking up.
Earlier this year, Apple (NasdaqGS: AAPL) ended a 13-year earnings winning streak and reported its first ever decline in iPhone sales. That report came just days after Google parent Alphabet (NasdaqGS: GOOG) and Microsoft (NasdaqGS: MSFT) lost a combined $30 billion in market value in a single day following disappointing earnings reports of their own.
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Regarding Apple, investors have grown increasingly concerned over the company’s iPhone sales growth, especially with China experiencing an economic slowdown. ETF investors will also have to keep a close eye on AAPL as the company makes up double-digit weights in most broad tech-sector ETFs, including the Vanguard Information Technology ETF (NYSEArca: VGT) and the iShares U.S. Technology ETF (NYSEArca: IYW).
However, the news is not all bad for the tech sector, the S&P 500’s largest sector weight.
“Crossing Wall Street editor Eddy Elfenbein pointed out that the majority of tech stocks actually reported decent first-quarter results, but these were overshadowed by the struggling big names,” according to CNBC.
The VanEck Vectors Semiconductor ETF (NYSEArca: SMH) and the iShares PHLX Semiconductor ETF (NasdaqGM: SOXX) are each up more than 8% over the past month as semiconductor stocks are rebounding to steady the broader technology sector, but that does not mean the gains are over for this suddenly hot group.