Tech stocks recently faced a severe downturn, sparked off by Taiwan Semiconductor Manufacturing Company Ltd.’s (TSM – Free Report) weak financial outlook for the second quarter. Adding to investor concerns were persistent worries over weak demand for Apple Inc.’s (AAPL – Free Report) iPhones.
In March, the data privacy scandal which hit Facebook, Inc. (FB – Free Report) triggered a broad selloff in tech shares. These concerns had then spilt over into April, spooking tech investors.
However, it now seems that strong earnings from the FAANG group of stocks have dispelled lingering concerns surrounding the sector. Tech stocks have rebounded strongly and are lucrative investment options at present.
Apple Consolidates Winning Streak, Facebook Sparks Rebound
Ahead of earnings on Tuesday, shares of Apple gained 2.3%, powering a 0.9% increase for the Nasdaq. Apple posted second quarter 2018 earnings of $2.73 per share, beating the Zacks Consensus Estimate of $2.69.
Revenues came in at $61.1 billion, in line with the Zacks Consensus Estimate of $61.1 billion. iPhone unit sales were up 3% from the prior-year quarter, with iPhone segment revenue coming in 14% higher.
Further, Apple said that it would be raising its dividend by 16% while also announcing “a new $100 billion share repurchase authorization.” Of course, the initial tech rebound was sparked off by stellar results from Facebook which helped tech stocks rebound on Apr 26.
The social media giant comfortably surpassed both earnings and revenue estimates for the first quarter. But more importantly, Monthly Active Users and Daily Active Users both posted year-over-year gains of 13%, an important development after events like the “Delete Facebook” Campaign. (Read:
The cycle began with Netflix’s (NFLX – Free Report) first-quarter 2018 earnings of 64 cents per share which grew 60% on a year-over-year basis and beat the Zacks Consensus Estimate by a penny.
