Wall St. eyes Apple and Facebook to fuel new leg of tech rally
By Noel Randewich
SAN FRANCISCO (Reuters) - Apple (AAPL.O: Quote) and Facebook (FB.O: Quote) may expand their already outsized share of U.S. technology revenue when they report their earnings this week, as investors look for evidence to justify this year's U.S. stock market rally.
The two are the last of the top five U.S. tech companies by market value to release their quarterly results, following reports from Alphabet (GOOGL.O: Quote), Microsoft (MSFT.O: Quote) and Amazon.com (AMZN.O: Quote) last week. Those reports impressed analysts and fueled confidence in the sector, which has so far been the top performer on Wall Street in 2017.
"If we look at the lion's share of the numbers, they're performing above expectations," said Daniel Morgan, a portfolio manager at Synovus Trust, which owns shares of Apple worth about $41 million and shares of Facebook worth $68 million.
"It gives validity to my position, which is that tech is, by far, the most exciting sector," Morgan said.
Shares of Facebook and Apple both hit record highs on Tuesday, up 0.53 percent and 0.75 percent respectively.
Surges in Apple, Facebook and other Silicon Valley heavyweights have pushed the S&P 500 technology index up by 16 percent this year.
And planned measures by President Donald Trump for steep corporate tax cuts and the easing of tax restrictions on profits made abroad would help Apple and other technology companies return more cash to shareholders.
The largest five Silicon Valley companies for years have been increasing their share of revenue and profits generated in the technology sector at the expense of smaller competitors. Continued...