Big tech names set to report this week include Intel and Yahoo tomorrow, eBay on Wednesday and Google on Thursday.
The tech sector has the highest projected earnings growth rate among the 10 S&P sectors for the second quarter at 12.3 per cent, its best quarter since the first quarter of 2012. This forecast marks a sharp rebound from a drop of 3.2 per cent just a year ago, according to a Thomson Reuters poll.
A Goldman Sachs note said the information technology sector “appears to be the most undervalued sector”, giving investors more reasons to be bullish on tech stocks. The implied earnings-per-share growth for the tech sector has been 5.4 percentage points above the S&P 500 on average over the past 10 years, but it is now just 1.0 percentage point above the benchmark index, the note said.
While the Dow Jones industrial average and the S&P 500 have hit record highs recently, the tech-heavy Nasdaq is still more than 700 points away from its all-time intraday high on March 10, 2000.
Wall Street will also tune in this week to what Federal Reserve Chair Janet Yellen says when she makes a couple of trips to Capitol Hill. She is scheduled to testify on the US central bank’s monetary policy in appearances before the Senate Banking Committee tomorrow and the House Financial Services Committee on Wednesday.