Best ETFs & Stocks From The Top Sector Of 2017
Zacks Investment Research | Dec 28, 2017 10:21PM ET
The technology sector has been the star performer of 2017 with the S&P 500 Information Technology Index gaining 37.6% compared with a gain of 19.8% for the S&P 500 Index.
Inside The Surge
The combination of strong corporate earnings and the soaring FAANG stocks — Facebook (NASDAQ:FB) , Amazon (NASDAQ:AMZN) , Apple (NASDAQ:AAPL) , Netflix (NASDAQ:NFLX) , and Alphabet (NASDAQ:GOOGL) — has been the major driver of the stellar performance. Notably, cutting-edge technology such as autonomous cars, cloud computing, gaming, wearables, VR headsets, drones, virtual reality devices, Internet of Things (IoT) and artificial intelligence are fueling exceptional growth in the sector, offsetting struggling traditional businesses like PCs and smartphones.
Encouraging fundamentals like improved overseas demand and a rising interest rate scenario are also adding to the strength. Further, Trump’s new tax structure, which allows companies to bring back cash held overseas at lower rates, are propelling the stocks higher. Per Moody’s, the top five U.S. hoarders are from the technology sector, namely Apple, Microsoft (NASDAQ:MSFT), Cisco (NASDAQ:CSCO) Alphabet, and Oracle (NYSE:ORCL) , which hold 88% of their money overseas.
Moreover, the industry is benefiting from an astronomical surge in cryptocurrencies such as bitcoin that has pushed semiconductor stocks to record highs. This is because mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) has been designed exclusively for mining bitcoin (read: Zacks Investment Research
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