Intrepid investors apparently continue to see US tech stocks going higher amid rapid earnings growth in the sector, despite lackluster performance of the broader economy.
The S&P 500 technology index closed at a record high of 992.29 Wednesday, surpassing the previous 988.49 peak in March of 2000.
“The business models of leading technology companies are some of the best we’ve ever seen,” Rahul Narang, a portfolio manager with Columbia Threadneedle was quoted by the Financial Times as saying. “These platforms are asset light, grow fast from network effects and are durable as they scale.”
“It’s not your father’s market. This is not what it was in Y2K,” Howard Silverblatt, senior index analyst with S&P Dow Jones Indices was quoted as saying. “The make-up and characteristics are different. Earnings are a lot more solid now. There are price-to-earnings ratios now, compared to ‘I wasn’t making any money back in 2000’.”