Technology stocks are surging after bulls got the strong earnings report they wanted from Netflix Inc.
Alphabet Inc. and Amazon.com Inc. rose more than 3 percent on Tuesday after Netflix kicked off earnings season for megacap technology companies with another
estimate-beating report. The S&P 500 Information Technology Index rose 2 percent to the highest since March 21, doubling the gains for the S&P 500 Index.
Shaken over the past month by privacy scandals, antitrust threats and market volatility, technology
investors had been looking to S&P 500-leading Netflix for a change of tone.
With Tuesday’s 10 percent gain, Netflix extended its 2018 return to 75 percent and is trading at record highs. The Los Gatos, California-based television and movie service has now added $63 billion in market value this year, putting its market cap at $146 billion, less than $8 billion away from Walt Disney Co.
Even with Netflix’s gains, it was Twitter Inc. leading the NYSE FANG index higher Tuesday with shares up as much as 12 percent after longtime bear Morgan Stanley
upgraded the stock and said analyst estimates look too low.
“Despite recent concerns around tech, the group is the most compelling, with
strong fundamentals, above-market revenue and organic earnings growth,” Jonathan Golub, chief U.S. equity strategist at Credit Suisse, said in a client note.
With Amazon, Alphabet, Twitter and Facebook Inc. all scheduled to report next week, investors will soon find out if earnings from tech’s marquee names can support Tuesday’s optimism.
— With assistance by Lucas Shaw