The Nasdaq Composite rose 3% on Dec 7 after gaining 0.9% on the previous day. The technology sector led the market rally with a 3.5% increase. The rally in the space has been largely caused by buyers purchasing the dip. Mega-cap tech stocks like Microsoft
MSFT
and Amazon
AMZN
increased more than 2%. Meta Platforms were also up 1.5%. The semiconductor space also saw gains, with major players like Intel
INTC
, Nvidia
NVDA
and Micron (MU) gaining at least 3%.
Investors willing to be part of the tech rally can bet on some top-ranked technology ETFs like
Vanguard Information Technology ETF
VGT
,
The Technology Select Sector SPDR Fund
XLK
,
iShares U.S. Technology ETF
IYW
and
First Trust NASDAQ-100-Technology Sector Index Fund
QTEC
.
Technology has played a major role in the ongoing health crisis. Telemedicine and Digital Health are receiving significant importance. Data management and storage have become integral aspects of healthcare in the present era. Thus, with the technological advancements in the healthcare sector and the rising adoption of healthcare IT solutions as well as advantages of cloud usage healthcare, the cloud computing market is on a growth trajectory.
The work-from-home model has bumped up sales of PCs, laptops and other kinds of computer peripherals. According to the latest Canalys report, worldwide PC sales climbed 5% in the third quarter of 2021 from the previous quarter. Total shipments of desktops and notebooks, including workstations, also came in at 84.1 million units during this period.
Certain other ‘new normal’ trends have also emerged amid the health crisis like work from home, increasing digital payments, growing video streaming and soaring video game sales.
The pandemic has been a blessing in disguise for the e-commerce industry to date as people continue to practice social distancing and shopping online for all essentials, especially food items. Thus, on par with the digitization trend, the upcoming U.S. holiday season is expected to see a significant surge in online sales.
Video gaming lovers in the United States have spent generously in October again. The industry continues to gain amid the health crisis. For 10 months, the total consumer spending on gaming is up 12% year over year to $46.67 billion (per The NPD Group data).
The semiconductor industry has increasingly gained investors’ attention backed by its bright prospects. The coronavirus-induced work-from-home and web-based learning trends have spurred demand for chips from PC manufacturers and data-center operators. The increasing importance of Hybrid cloud among enterprises is attracting investments from large public cloud providers, including Amazon Web Services, Microsoft Azure, Google Cloud, International Business Machines and Oracle.
Technology ETFs to Keep Track of
All the factors discussed above highlight the instrumental role that technology plays amid the ongoing COVID-19 uncertainty in aiding people to maintain safe-distancing norms. Thus, investors could consider the following ETFs:
Vanguard Information Technology ETF
Vanguard Information Technology ETF seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index. VGT has AUM of $53.93 billion. It charges investors 10 basis points (bps) in annual fees. Vanguard Information Technology ETF currently sports a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook (read:
Top-Ranked Tech ETFs to Buy on the Latest Dip
).
The Technology Select Sector SPDR
Fund
The Technology Select Sector SPDR seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Technology Select Sector Index. XLK has AUM of $49.50 billion. It charges investors 12 bps in annual fees. The Technology Select Sector SPDR presently flaunts a Zacks ETF Rank of 1, with a Medium-risk outlook (read:
Here’s Why You Need to Bet on Big Tech ETFs Right Now
).
iShares U.S. Technology ETF
iShares U.S. Technology ETF seeks to provide investment results that before expenses generally correspond with the price and yield performance of the Russell 1000 Technology RIC 22.5/45 Capped Index. IYW has AUM of $9.79 billion. It charges investors 41 bps in annual fees, as stated in the prospectus. iShares U.S. Technology ETF currently sports a Zacks ETF Rank #1, with a Medium-risk outlook.
First Trust NASDAQ-100-Technology Sector Index Fund
First Trust NASDAQ-100-Technology Sector Index Fund seeks to replicate as closely as possible, before fees and expenses, the price and yield of the NASDAQ-100 Technology Sector Index. QTEC has AUM of $3.93 billion. It charges investors 57 bps in annual fees. First Trust NASDAQ-100-Technology Sector Index Fund also flaunts a Zacks ETF Rank #1 at present, with a High-risk outlook.
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