Tech ETFs Surge as Earnings Power Rally

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Some observers are concerned about the pricey valuations in the growth sector as the tech segment has been among the best performers this year. Strong earnings, though, may help support the higher prices.

“Valuations across the board may be frothy, but I think there are plenty of companies who can justify their valuations,” Jon Mackay, investment strategist at Schroders, told the WSJ, adding the tech sector is large, and there are plenty of high-performing hardware companies as well as those known for their innovative products.

“In many ways, we’re seeing the strong getting stronger,” Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank, told Reuters. “While valuations are full, it certainly becomes imperative on them to deliver solid operating results and that’s something that we did see.”

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