Tag Archives: Dow Jones

The tech sector in the first quarter of 2017

 

Consumption of new and emerging technologies is higher than ever, helping the technology sector successfully win the race for the world’s top industry based on market size and total revenues.  Leading tech companies are especially powerful, with each of their avid customers gobbling up every single release that is made available in stores. Just a single glance at the stock market, one can clearly see that the industry as a whole has been having a happy 2017, so far.

NASDAQ overall has gained 9.8 percent since January, while the Dow Jones Industrial Average settled in at 4.5 percent. The S&P 500 Information Technology Sector posted a 12.5 percent growth for the first quarter of 2017, making it the undisputed leader among all sectors. It is followed by Consumer Discretionary (up 8.45 percent), Health Care (up 8.37 percent), Energy (down 6.68 percent), and Telecom Services (down 3.97 percent).

Ever since Donald Trump has been elected president of the United States, the world economy has been plagued with doubt and uncertainty. That is why investors are flocking to IT companies because they are relatively unaffected by tax cuts and interest rates, apart from the fact that people are just plain hungry for innovations. Furthermore, if ever deregulatory moves and lowered business taxes materialize, those types of companies will benefit from them the most.

 

The top tech stocks

While the FANG (Facebook, Amazon, Netflix, and Google) group are the obvious frontrunners in the tech sector, they are not necessarily the best performers for the last three months. Semiconductor companies performed quite more impressively.

Micron Technology takes the biggest slice of the cake, exhibiting a first quarter stock performance of plus 32.3 percent with a market cap of $31.97 billion. Their performance was truly remarkable, but those numbers are about to get even bigger later this year as the demand for NAND and DRAM chips are expected to rise even further.

In close second is Skyworks Solutions. They are just nearly 1 percent behind the leader, closing the first quarter at plus 31.4 percent. They are the ones who will be providing chips to the up-and-coming iPhone 8 and Samsung Galaxy 8. Once those phones make their debut later this year, the company will surely be able to make a killing.

Just like Skyworks, Qorvo has close ties with Apple for they are the primary supplier of the radio frequency semiconductors that are being used in iPhones. Just like its predecessor, they are also set to benefit from the upcoming sale of Apple’s newest product, the iPhone 8. Their first quarter performance was pinned at 30.1 percent with a market cap of $8.83 billion.

Optimism about the highly regarded Ryzen CPUs led to the gains that Advanced Micro Devices experienced. They did great with a 28.3 percent first quarter performance. Their market cap on the other hand was valued at $14.04 billion. Once the CPU is officially released, AMD’s earnings and revenue will certainly skyrocket, even surpassing expectations.

Tech companies are definitely performing strongly overall. Looking at the biggest winners for the past couple of months, it is clear that semiconductor and microchip companies are on the higher end of the spectrum, and further growth toward the end of the year is highly probable. Higher demand coupled with strong earnings will be the primary drivers. The industry’s future is shining very brightly that it is blinding.