By John Nyaradi
Tech Sector ETFs including the PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ), the Technology SPDR Fund ETF (NYSEAMEX:XLK), the Vanguard Information Technology ETF (NYSEAMEX:VGT), and the iShares Dow Jones US Technology ETF Fund (NYSEAMEX:IYW), all rose significantly Wednesday in anticipation of Facebook’s IPO filing. After market close, Facebook began raising $5 billion in revenue which happens to be the largest internet IPO filing in history.
The tech sector and tech sector ETFs have been on a tear recently as positive earnings reports and Facebook IPO anticipation drove the NASDAQ last week to its eleven year high. Tuesday we asked if tech sector ETFs were going to diss Amazon’s (NASDAQ:AMZN) poor earnings or bask in Facebook’s bliss in our post “Tech Sector ETFs: Amazon Diss or Facebook Bliss?”
After Wednesday’s strong performance by tech sector ETFs, we have concluded that Tech Sector ETFs did indeed diss Amazon and instead soaked up the Facebook bliss. Our only question now is, will Tech Sector ETFs rise and create a new Facebook Bubble?
Tech Sector ETF Summary
- PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ): +0.49 (0.81%)
- Technology SPDR ETF (NYSEAMEX:XLK): +0.27 (1.00%)
- Vanguard Information Technology ETF (NYSEAMEX:VGT): +0.78 (1.18%)
- iShares Dow Jones US Technology ETF Fund (NYSEAMEX:IYW): +0.74 (1.07%)
Bottom Line: Facebook Bliss or Facebook Bubble? Since the NASDAQ reached its 11 year high last week, we are hesitant to say that the tech index or tech sector ETFs could go much higher. However, in light of Facebook’s recent IPO, the tech sector could see a significant rise for quite some time, as Facebook’s IPO is the largest internet IPO filling ever. Keep in mind however that what goes up will likely correct itself, and if indeed the Facebook IPO takes the tech sector and tech sector ETFs to new highs, the Facebook bubble pop could be painful.
Disclosure: Wall Street Sector Selector actively trades a wide range of exchange traded funds and positions can change at any time.