Tech is outperforming every other sector this year, adding $1 trillion in four months
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Tech is outperforming every other sector this year, adding $1 trillion in four months

Over the last four months, the technology sector has added more than $1 trillion in market capitalisation. This incredible run of success has seen it finish all but one of the last seventeen weeks positively, and the first moves of earnings season are simply shoring up the good news. Facebook, Amazon and Netflix have all recently reported the kind of blockbuster earnings that are driving tech’s growth, and more will add to these reports this week.

Dominion’s Ecommerce Fund holds all but one of the FAANG (Big Tech’s biggest tech) – so far this year, they’re working out very well for investors

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Source: Yahoo Finance

What’s strange about this story? Aren’t we used to seeing Silicon Valley’s big names (and their peers from elsewhere in the world) deliver this kind of “can’t quite conceptualise the numbers” growth? Certainly, anyone who has followed Amazon, Alphabet, or Facebook should be used to it. But this year, it’s particularly notable for one thing: tech is currently outperforming despite being massively unpopular.

Cast your mind back a couple of years: Amazon has finally become profitable, Google is restructuring into Alphabet and promising to finally give investors more insight into its financials, and Facebook is widely thought of as a blessedly apolitical platform. Young giants like Netflix and Spotify – now, seemingly, ubiquitous – are poised for an incredible ascent. Cloud computing is on the horizon – Joe Public is still trying to figure out what, exactly, it is… weather-based data storage? Something like that?

Back in this not-too-tightly defined era, tech was also outperforming on a massive scale. But it wasn’t hard to believe: tech was super popular. Everyone was on Facebook, and giddily talking about how it had become the go-to for news, none of which was derided as fake (everything’s twenty-twenty with hindsight…). Amazon was the ultimate entrepreneurial success story – one guy started selling books in the 90s, now he’s a billionaire that’s revolutionised retail. And everyone loved Google… hell, its motto was “don’t be evil” (a phrase it has, somewhat sinisterly, dropped).

The amazing thing is that tech continues to perform so well. Facebook has spent the last few years enmeshed in scandal after scandal, most of which focus on data, privacy, politics, or some combination of the three. Alphabet has faced outrage over military contracts, privacy, and staff treatment. Amazon has come under so much pressure over worker compensation that it raised its minimum wage to $15 – and one of the Democratic hopefuls for next year’s presidential race has publicly called for its break up under anti-competition law.

What does this tell us? Three things, I think: first, that canny investors will learn to ignore the headlines when they start to seem divorced from reality. Second, that Big Tech is now so tightly interwoven with modern life that it can’t be un-woven: even in the midst of Facebook’s PR crisis at the end of last year, advertising revenue continued to rise. And third, any investor who wants to invest in trends that are shaping the world needs to have an eye on the tech sector.


Dominion’s Global Trends Ecommerce Fund has significant exposure to the technology sector. In addition, all of Dominion’s Global Trends range of Funds hold technology stocks that align with their investment thesis.

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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.