Technology stocks and the corresponding exchange traded funds have been key drivers of the bullishness surrounding the technology sector, the S&P 500’s largest sector weight, to start 2017.
Semiconductor ETFs have recently been durable performers 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. However, valuations are rising for chip stocks.
“The Philadelphia Semiconductor Index, composed of 30 chip-related companies, has gained 47 percent since last April, fueled by an unprecedented flood of mergers and orders for products that make up the guts of gadgets like refrigerators to smartphones. That’s made the $300 billion industry look expensive relative to earnings as growth is expected to moderate,” according to Bloomberg.