“Even after an exceptionally strong run in 2017, and the possible impact of greater regulatory intervention, the shorter-term outlook for technology remains robust,” said SSgA. “In our quantitative analysis, the tech sector’s value metrics continue to score highly compared to other sectors. Momentum and sentiment are also favorable, with sentiment capturing tech’s recently strong upward earnings and revenue revisions.”
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Even with Facebook’s recent slide, the sector has some notable tailwinds to consider.
“Stronger economic growth and a potential boost to capital expenditures from the US tax changes should provide tailwinds for these stocks. At the same time, tech companies tend to be less levered than other sectors—an advantage in an environment that is increasingly sensitive to rising interest rates—helping to support our positive near-term outlook,” according to SSgA.
For more information on the tech sector, visit our technology category.
Tom Lydon’s clients own shares of QQQ, Apple, Facebook and Microsoft.