5 Bargain ETFs To Tap Renewed Tech Strength

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The technology sector has been underperforming the market of late in the wake of earnings announcement. This is especially true as the big five tech titans, namely Apple (AAPL - Free Report), Microsoft (MSFT - Free Report), Alphabet (GOOGL - Free Report), Amazon.com (AMZN - Free Report) and Facebook (FB - Free Report) failed to impress investors this reporting cycle. Total Q2 earnings from the group of these five companies are expected to be up 88% on revenue growth of 35.4%. This indicates deceleration from the first-quarter earnings growth rate of 104% and the revenue rise of 41.5%.

Beyond the big five players, total sector earnings for the companies reported so far seem good otherwise. Total Q2 earnings from 85.1% of the sector’s market capitalization in the S&P 500 Index are up 66% from the same period last year on 26.3% higher revenues with 96.2% beating EPS estimates while 94.3% surpassing revenue expectations.

The beaten-down prices compelled investors to grab the stocks on cheap, pushing up not only the technology sector higher but also sending the S&P 500 to new highs in Aug 12 trading session. This suggests renewed momentum for the sector ahead at least in the near term.

Additionally, the spike in the Delta variant of COVID-19 cases once again propelled demand for stay-at-home trends, leading to acceleration in e-commerce for everything, ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, IoT, wearables, VR headsets, drones, virtual reality, AI, machine learning, digital communication, and 5G technology will also continue to drive the sector higher.

Investors should cash in on an opportune moment with the bargain ETFs. We highlighted some ETFs that have been in the red over the past month but possess a solid upside potential, given the encouraging fundamentals:

Roundhill Streaming Services & Technology ETF (SUBZ - Free Report) — Down 7.5%

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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