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Tech Stock Comeback Meets Skepticism as Earnings Season Approaches"

A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other mega cap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff.



The tech-heavy Nasdaq 100 index has gained nearly 6.2% in 2023, compared to a 3.45% rise for the S&P 500. Several factors are driving that outperformance, including investors piling into stocks they believe were overly punished in 2022. A moderation in bond yields, whose jump last year particularly pressured tech-stock valuations, is also likely helping the group, investors said.

Now, however, the focus is shifting to whether these companies can withstand a widely expected economic downturn while supporting valuations that some investors believe are too high. Tech and growth stocks led U.S. equity markets for years following the 2008 financial crisis, aided by near-zero interest rates. They struggled along with broader markets last year as the Federal Reserve raised rates to fight surging inflation, and some investors doubt they will regain the market's pole position any time soon.


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