We will see if this week’s earnings reports from Apple (AAPL – Free Report) and Facebook (FB – Free Report) can sustain the strong showing from many other Technology players in recent days. The sector’s Q1 results and management’s commentary for the current and coming quarters support Technology stocks impressive stock market performance this year (the Zacks Tech sector is up +11.2% year-to-date vs. +6.8% gain for the S&P 500 and +3.7% for the Russell 2000).
The Technology sector’s Q1 results are building on the momentum we have been seeing this earnings season from a diverse cross-section of companies. Not only is an above-average proportion of companies beating estimates, particularly revenue estimates, but growth has continued to accelerate from the pace that we have been seeing in recent quarters and is on track to reach its highest level in many years. Importantly, estimates for the current period (2017 Q2) appear to be holding up nicely as well. The continuation of these trends through the rest of this earnings season should serve as a reassuring development for the market.
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