The enormous rally in tech stocks has further to run, according to analysts at investment bank J.P. Morgan, who recommend staying invested across the sector for its growth potential.
Stocks across the industry, from hardware to software, have outperformed the market by miles this year as the COVID-19 crisis accelerates reliance on the internet for commerce.
“In contrast to the dot-com bubble, the current rally has been supported by strong earnings delivery,” J.P. Morgan’s equity strategists said in a note on Monday, saying they are sticking with an “overweight” recommendation on the sector.
“In addition to resilient earnings growth, tech has healthy balance sheets and strong cash flow generation, again in contrast to the 2000 episode.”
The MSCI World Information Technology index <.MIWO0IT00PUS> is up 27% this year compared with a 1.5% rise in global stocks <.MIWO00000PUS>.
(Reporting by Tom Westbrook and Tanvi Mehta; Editing by Kim Coghill)