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What Tech Crash? 5 Tech ETFs Up Double-Digit Past Month
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The technology sector, which had its best January in decades, faltered lately following a slew of weak earnings reports from the tech titans and renewed rising rate concerns. The U.S. benchmark treasury yield started to rise all over again as the release of upbeat economic data points and stubborn inflation data triggered the possibilities of faster and fatter Fed rate hikes.
Rising rate worries dampen the appeal of the stocks that rely on easy borrowing for superior growth. Hence, shares of high-growth technology companies remain in a tight spot in such a scenario. Moreover, earnings results were not satisfactory. Meanwhile, the pandemic-led boom of the tech sector resulting from the stay-at-home trend is fading as the health crisis is ebbing. The tech sector is now in the process of right-sizing.
Earnings from 83.7% of the tech sector’s market capitalization that have reported results so far are down 18.9% from the same period last year on 3.7% lower revenues, with 73.2% beating EPS estimates and 71.4% beating revenue estimates. The earnings beat ratio is the lowest in the preceding 20 quarters, while the revenue surprise is also toward the lower end of the 5-year range, per Earnings Trends issued on Feb 15, 2023.
Apple Inc. (AAPL - Free Report) shares marked the first year-over-year sales decline since 2019. Intel (INTC) also came up with weaker results and offered a weak outlook for 2023, citing cooling demand for its chips used in personal computers. Although Amazon (AMZN) beat earnings and revenue estimates, it posted the least profitable holiday quarter since 2014 (read: Time to Take a Bite Out of Apple ETFs Following Warren Buffett?)
Against this backdrop, below we highlight a few tech ETFs tht were up double digits past month (as of Feb 17, 2023) against an uptick of 5.81% in the tech-heavy Nasdaq Composite index. Notably, next-gen Internet, artificial intelligence, cyber security, electric vehicles and blockchain are areas that have remained strong so far this year due to their solid long-term potential.
ETFs in Focus
ARK Next Generation Internet ETF (ARKW - Free Report) – Up 16.9% Past Month
This ETF is active and does not track a benchmark. The ARK Next Generation Internet ETF is actively managed and seeks long-term growth of capital by investing under normal circumstances primarily in domestic and U.S. exchange traded foreign equity securities of companies that are relevant to the theme of next-generation Internet. The fund charges 83 bps in fees.
WisdomTree Cybersecurity Fund (WCBR - Free Report) – Up 15.6%
The underlying WisdomTree Team8 Cybersecurity Index is designed to track the performance of companies primarily involved in providing cyber security-oriented products. The fund charges 45 bps in fees.
ProShares Big Data Refiners ETF (DAT - Free Report) – Up 13.5%
The underlying FactSet Big Data Refiners Index tracks the performance of companies that provide analytics, software, hardware and other computing infrastructure for managing and extracting information from large structured and unstructured datasets. The fund charges 58 bps in fees.
This ETF is active and does not track a benchmark. ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically enabled new product or service that potentially changes the way the world works. The fund offers exposure to “genomic revolution,” automation, robotics, energy storage, artificial intelligence, next-generation Internet and fintech innovation. The fund charges 75 bps in fees.
TrueShares Technology, AI And Deep Learning ETF (LRNZ - Free Report) – Up 11.9%
The TrueShares Technology, AI and Deep Learning ETF is an actively-managed exchange-traded fund that seeks total return by investing in companies that have a competitive advantage with respect to the development and utilization of artificial intelligence, machine learning, or other deep learning technologies. The fund charges 68 bps in fees.
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What Tech Crash? 5 Tech ETFs Up Double-Digit Past Month
The technology sector, which had its best January in decades, faltered lately following a slew of weak earnings reports from the tech titans and renewed rising rate concerns. The U.S. benchmark treasury yield started to rise all over again as the release of upbeat economic data points and stubborn inflation data triggered the possibilities of faster and fatter Fed rate hikes.
Rising rate worries dampen the appeal of the stocks that rely on easy borrowing for superior growth. Hence, shares of high-growth technology companies remain in a tight spot in such a scenario. Moreover, earnings results were not satisfactory. Meanwhile, the pandemic-led boom of the tech sector resulting from the stay-at-home trend is fading as the health crisis is ebbing. The tech sector is now in the process of right-sizing.
Earnings from 83.7% of the tech sector’s market capitalization that have reported results so far are down 18.9% from the same period last year on 3.7% lower revenues, with 73.2% beating EPS estimates and 71.4% beating revenue estimates. The earnings beat ratio is the lowest in the preceding 20 quarters, while the revenue surprise is also toward the lower end of the 5-year range, per Earnings Trends issued on Feb 15, 2023.
Apple Inc. (AAPL - Free Report) shares marked the first year-over-year sales decline since 2019. Intel (INTC) also came up with weaker results and offered a weak outlook for 2023, citing cooling demand for its chips used in personal computers. Although Amazon (AMZN) beat earnings and revenue estimates, it posted the least profitable holiday quarter since 2014 (read: Time to Take a Bite Out of Apple ETFs Following Warren Buffett?)
Against this backdrop, below we highlight a few tech ETFs tht were up double digits past month (as of Feb 17, 2023) against an uptick of 5.81% in the tech-heavy Nasdaq Composite index. Notably, next-gen Internet, artificial intelligence, cyber security, electric vehicles and blockchain are areas that have remained strong so far this year due to their solid long-term potential.
ETFs in Focus
ARK Next Generation Internet ETF (ARKW - Free Report) – Up 16.9% Past Month
This ETF is active and does not track a benchmark. The ARK Next Generation Internet ETF is actively managed and seeks long-term growth of capital by investing under normal circumstances primarily in domestic and U.S. exchange traded foreign equity securities of companies that are relevant to the theme of next-generation Internet. The fund charges 83 bps in fees.
WisdomTree Cybersecurity Fund (WCBR - Free Report) – Up 15.6%
The underlying WisdomTree Team8 Cybersecurity Index is designed to track the performance of companies primarily involved in providing cyber security-oriented products. The fund charges 45 bps in fees.
ProShares Big Data Refiners ETF (DAT - Free Report) – Up 13.5%
The underlying FactSet Big Data Refiners Index tracks the performance of companies that provide analytics, software, hardware and other computing infrastructure for managing and extracting information from large structured and unstructured datasets. The fund charges 58 bps in fees.
ARK Innovation ETF (ARKK - Free Report) – Up 13.0%
This ETF is active and does not track a benchmark. ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically enabled new product or service that potentially changes the way the world works. The fund offers exposure to “genomic revolution,” automation, robotics, energy storage, artificial intelligence, next-generation Internet and fintech innovation. The fund charges 75 bps in fees.
TrueShares Technology, AI And Deep Learning ETF (LRNZ - Free Report) – Up 11.9%
The TrueShares Technology, AI and Deep Learning ETF is an actively-managed exchange-traded fund that seeks total return by investing in companies that have a competitive advantage with respect to the development and utilization of artificial intelligence, machine learning, or other deep learning technologies. The fund charges 68 bps in fees.