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6 Technology Stocks Set To Beat Estimates In Q2 Earnings

The second-quarter 2017 earnings season is in its initial stage with just 23 S&P 500 members or 4.6% of the index’s total membership reporting their quarterly results as of Jul 7, according to the latest Zacks Earnings Preview report.

Per the Preview article, the trend this earnings season indicates that we may finally see back-to-back four quarters of earnings growth in the Technology sector, after several quarters of decline. The report projects that earnings for the sector will improve 10.1% from the year-ago period on 6% higher revenues.

The strong growth projections may be mainly attributed to the growing adoption of cloud computing, cloud infrastructure build-out, Big Data, flash storage, networking, security, 3D printing, wearable devices and Internet of Things (IoT) at home, office and car. Apart from this, modestly improving PC shipments also raise expectations.

Additionally, anticipation of a recovery in IT spending in 2017, after two consecutive years of decline, according to a research report of Gartner Inc. (IT), bodes well for the technology sector. Gartner projects IT spending to increase 1.4% year over year to $3.41 trillion in 2017. Notably, in 2015 and 2016, worldwide spending declined 5.5% and 0.6%, respectively.

The optimism surrounding the technology sector is well reflected in its year-to-date performance. The sector has outperformed the S&P 500 in the aforesaid period. Notably, the Technology Select Sector SPDR ETF (XLK) returned 14.7% in the year-to-date period compared with the S&P 500’s gain of 8.3%.

The technology space continues to be investors’ favorite due to its dynamic nature. It is predicted to grow faster than ever before as evident...


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