Tech Sector Gains 2.75% in Q3 on AI Momentum
The technology sector (XLK) posted a strong performance in the third quarter, gaining nearly 2.75%. This growth was driven by robust demand for artificial intelligence (AI) and continued investment in AI infrastructure, which supported major tech stocks.
Key players like Nvidia (NVDA), Microsoft (MSFT), Meta Platforms (META), and Apple (AAPL) saw significant gains, with increases of 14.13%, 37.5%, 28.74%, and 15.08% respectively. Julian Lin, Investing Group Leader for Best Of Breed Growth Stocks, noted that the sector is positioning for another AI trade, potentially leading to a re-run of the SaaS Apocalypse and a return of the AI momentum trade.
Everpure (P) was the standout performer, surging over 80% after unveiling a broader growth strategy and issuing a preliminary FY28 outlook that exceeded analyst revenue expectations. Lin described this as an AI infrastructure re-rating, highlighting the company's shift from a storage-box story to a data-management platform, though he cautioned about its high valuation and negative free cash flow.
Hewlett Packard Enterprise (HPE) and Accenture (ACN) also performed well, gaining nearly 57% and 55.6% respectively. Lin attributed HPE's success to a record quarter, significant AI backlog, and landmark deals with Oracle and Vultr, but warned about potential supply constraints through 2028. Among the top detractors, Fair Isaac (FICO) lost nearly 51.2% following regulatory changes, while First Solar (FSLR) slipped nearly 21.7% due to high borrowing costs and tax law impacts.