Technology companies have regained their footing in recent months as volatility dissipated and investors renewed their focus on a beaten up growth category, with the Nasdaq Composite and the PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100 Index, both making new highs.
Ever since the so-called Brexit vote to leave the European Union rocked global markets, technology stocks have led the market rebound. More recently, after the Federal Reserve’s decision to leave rates unchanged, broad markets pushed forward with the Nasdaq hitting a new record high Thursday.
Looking ahead, growing optimism for the upcoming earnings season is also fueling the rally in tech as many market observers anticipate a turnaround in corporate profits. Historically, after a profit falloff, the technology sector has been among the best areas in a rebound.
“The only sector that has record an increase in expected earnings growth since the start of the quarter (due to upward revisions to earnings estimates) is the information technology sector,” according to FactSet.
Overall, 33 of the 66 companies in the info tech sector have experienced a rise in their mean earnings-per-share estimates to date.