The earnings parade last week was led by tech giants—Apple (
AAPL
), Microsoft (
MSFT
), Amazon (
AMZN
), Alphabet (
GOOGL
) and Facebook (
FB
). They all reported record revenue growth and crushed estimates. While all these companies benefitted from the pandemic driven trends, some of those trends may become permanent.
Combined market capitalization for the five tech giants now exceeds $8 trillion, and accounts for about a quarter of the total S&P 500 capitalization, almost double the percentage five years ago, per WSJ. Digital adoption is expected to continue to accelerate and drive long-term growth for these companies.
Technology stocks stumbled yesterday, with other growth stocks, as investors are concerned about the prospect of rising rates. And some investors are rotating into cyclical companies that stand to benefit the most from the economic recovery.
Tech stocks and ETFs still deserve a place in any long-term focused portfolio as these moneymaking machines would continue to thrive in the coming years.
To learn more about the Vanguard Information Technology ETF (
VGT
), the most popular and one of the cheapest tech ETFs, the iShares U.S. Technology ETF (
IYW
) and the Invesco Nasdaq 100 ETF (
QQQM
), please watch the short video above.
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