U.S. technology stocks were under significant pressure in early August. However, the tech space showed signs of improvement from mid-August as investor positioning remained heavily weighted toward bullish sentiment despite early-August selloffs. Overall, the Technology Select Sector SPDR Fund XLK gained 3.6% in the past one month (as of Aug. 29, 2024).
There was some company-specific news that impacted the tech world in August. A judge ruled that Google’s search and ad businesses violated antitrust laws, contributing to a decline in its share price. Google-parent Alphabet Inc Class A GOOGL’s past month’s share price decline was 5% (as of Aug. 29, 2024).
Apple AAPL shares, initially declined after Berkshire Hathaway (BRK-B) disclosed that it had reduced its stake in the iPhone maker by half. But overall, the iPhone maker’s stock is up 5% past month. The same fact was applicable to NVIDIA NVDA stock. Although the AI king’s stock slumped initially on cues of delayed return-on-investments on tech biggies’ huge AI investments, NVIDIA stock recouped losses and gained 13.4% past month.
The semiconductor sector was hit hard, with Intel INTC shares plummeting massively following a disappointing second-quarter earnings report. INTC shares are down 33% in the past month. No wonder, the tech-heavy Nasdaq Composite suffered a lot in early August.
Time to Buy the Tech Stock Volatility?
The AI rally is still hot. In a 2024 McKinsey survey, 39% of respondents saw lower costs resulting from AI adoption in their organization, according to Forbes. This means that over the long run, the AI business may prove to be at least a volume-driven revenue engine, if not realization-driven.
Meanwhile, big tech companies are making investments in AI in full stride, sensing the potential. So, if you are not buying the space now, you may miss out on an opportunity. And by the time, you want to jump into the AI initiative, the move might already be priced in. Agreed, the current volatility is worrying some investors. But these are probably healthy corrections (read: Will Tech ETFs See Further Selloffs?).
Winning Tech ETFs of August
Against this volatile backdrop, we highlight below a few tech ETFs that survived the turmoil and won in the month of July. These ETFs mainly came from the cybersecurity space. There has been a significant rise in cyberattacks.
The shift toward cloud computing and the adoption of zero-trust security models have led to the high demand for advanced cybersecurity. Heightened geopolitical tensions also led organizations to seek to protect their digital assets and adopt more and more cybersecurity solutions.
Cybersecurity ETFs
First Trust NASDAQ Cybersecurity ETF CIBR andAmplify Cybersecurity ETF HACK gained more than 6% in the past month (as of Aug. 29, 2024). Several cybersecurity companies are coming up with upbeat earnings. For example, Crowdstrike Holdings Inc CRWD is up 16.3% in the past month. CrowdStrike’s results were stronger than expected for the quarter.
Palo Alto Networks PANW and Zscaler Inc ZS stocks are up 12.8% and 11.6%, respectively, in the past month. Fortinet Inc FTNT stock has jumped 32.6% past month.Zscaler and Fortinet reported impressive financial results. Investors should note that cybersecurity ETF Global X Cybersecurity ETF BUG also gained 5% in the past month. iShares Cybersecurity and Tech ETF IHAK surged 4.7% in the past month.
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Intel Corporation (INTC) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Amplify Cybersecurity ETF (HACK): ETF Research Reports
First Trust NASDAQ Cybersecurity ETF (CIBR): ETF Research Reports
Zscaler, Inc. (ZS) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
iShares Cybersecurity and Tech ETF (IHAK): ETF Research Reports
Global X Cybersecurity ETF (BUG): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
