The tech sector has performed favorably in recent times on the back of encouraging earnings results. Although Trump’s proposed trade and immigration policies are expected to weigh on big technology companies, his corporate tax repatriation plans could benefit technology companies that hold a lot of cash overseas. These tech companies could repatriate that cash and use it for investments, dividends and buybacks.
Tech behemoth Apple Inc (AAPL – Free Report) made a strong rebound on the back of strong fiscal first-quarter earnings results. The good show was driven by impressive iPhone 7 and 7 Plus sales. Following these promising trends, investing in technology mutual funds with a significant holding in the iPhone maker and other tech giants will be a prudent decision.
Q1 Earnings in Focus
Apple’s fiscal first-quarter earnings of $3.36 per share and revenues of $78.4 billion easily topped the respective Zacks Consensus Estimate of $3.22 and $76.9 billion. On a year-over-year basis, earnings and revenues registered growth of 2.4% and 3.3% respectively. Services, which include revenues from Internet Services, App store, Apple Music, AppleCare, Apple Pay, licensing and other services, surged 18% year over year to nearly $7.2 billion.
Additionally, total iPhone unit sales came in at about $78.3 million, up 5% year over year. Revenues from iPhone also grew 5% from the year-ago quarter to $54.4 billion (69.4% of total revenue). Moreover, optimism of the tech behemoth’s forthcoming series of iPhone upgrades in the coming months encouraged some analysts to raise their price targets.
Apple Rally Boosts Tech Sector
Gains in Apple came as a breather for the broader technology sector. The iPhone maker remained the biggest company in the index in terms of market capitalization. Along with Apple some other big tech companies like Microsoft (MSFT – Free Report), Alphabet (GOOGL – Free Report), Netflix (NFLX – Free Report) and Facebook (FB – Free Report) reported solid earnings results.
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