(CTN News) – Tech stocks are once again leading the market higher as investors snap up shares after being shunned during the widespread selloff earlier this year. The stock market dropped nearly two months ago.
The Rise Of The Tech Market.
After a brutal market selloff in the first half of 2022, investors piled into defensive sectors like utilities, consumer staples, and healthcare. Since June 16, shares of Big Tech companies have risen nearly 15%.
Investors are buying up shares of tech companies following a better-than-expected earnings season, outpacing much of the market.
Stocks have also recovered due to expectations that inflation has peaked and will moderate, which may prompt the Federal Reserve to slow its aggressive rate hikes.
Last Friday’s better-than-expected jobs report eased recession fears, and inflation cooled in July, rising just 8.5% compared to economists’ expectations of 8.7%.
In the last two months, tech giants like Apple and Amazon are among the best performers in the sector, while Netflix and Tesla are both up 40% and 37%.
Wedbush Analyst Dan Ives.
According to Wedbush analyst Dan Ives, the second-quarter earnings season was a “major victory” for tech companies, with spending, cloud software, consumer demand, and even digital advertising all doing better.
Ives says “the fourth Industrial Revolution tech trends will not go away despite the slower growth over the next six to nine months,” and he remains bullish on the stock market.
According to him, Apple and Microsoft are some of the top stocks in the sector, while Tesla remains the “top disruptor” of the sector as it ramps up the production of electric vehicles.
Among the other tech stocks that have gained since the market hit its low on June 16 are Facebook parent Meta (up 10%), Alphabet parent Google (nearly 13%), and Microsoft (over 17%).
Surprising Facts ;
There were record inflows into tech stocks last week, with Bank of America clients buying shares at their highest level since 2008.
Despite the recent influx of investors piling back into Big Tech names, Bank of America analysts remain cautious: “We see a risk that Tech may not prove as defensive as some investors expect,” the firm says.
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