How you can quickly tell Wall Street still really loves tech stocks

Wall Street remains enamored with tech stocks, confident they will thrive despite concerns about AI spending and rising interest rates. Global technology funds saw a staggering $195 billion in inflows over the past year, eclipsing the combined inflows of the next nine sectors. These investments have doubled recently, signaling strong investor appetite. Strategists at The Kobeissi Letter note that technology funds currently dominate global investment demand.

The recent earnings performance of tech giants, known as the Magnificent 7, has been extraordinary. Their second quarter earnings surpassed estimates by 66.2%, nearly three times the 26.5% growth seen across the S&P 500 as a whole. The Magnificent 7 comprises Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Notably, their earnings growth rate reached an all-time high for the period since Q4 2020, while the broader S&P 500's earnings growth for the same period was a more modest 31.8%. The primary drivers of this surge were Alphabet, Amazon, Micron, Nvidia, and Chevron.