Megacap tech may be the ultimate ‘quality' play in an uncertain economy, The ETF Store president suggests
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Investors are favoring megacap tech stocks as a quality play due to their tangible earnings and cash on the balance sheet, according to The ETF Store President Nate Geraci. Technology is currently the largest sector in the S&P 500, comprising nearly 30% of the index. The sector's earnings growth rate is projected to reach 23.7% for the first quarter. Even in an economic slowdown, Geraci believes quality tech names can remain in a leadership role as investors seek earnings and cash flow. However, not all tech stocks have performed equally well, with Cathie Wood's Ark Innovation ETF down 15% since the start of the year. Geraci suggests that investors are shying away from speculative bets and companies with earnings far into the future.

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https://www.cnbc.com/2024/05/08/why-tech-is-outperforming-markets-despite-higher-interest-rates.html