The solid second-quarter earnings reported by industry leaders has offset the market pullback witnessed last Monday, allowing benchmark indexes to rally for four consecutive days to close at record highs on Friday. While the relatively expensive mega-cap stocks drove the tech-heavy Nasdaq Composite's performance last week, cheaper tech stocks Fujitsu (FJTSY), Sharp (OTC:SHCAY), LG Display (NYSE:LPL), and SolarWinds (SWI) are also expected to benefit from the growing optimism surrounding the tech industry in the near term. So, let’s discuss some more.Benchmark indexes shrugged off concerns related to the spread of the COVID-19 Delta variant to close at record highs last Friday. Investors’ concerns about a potential market correction were offset by the impressive earnings reported by industry leaders. According to Factset, 24% of the S&P 500 companies reported second-quarter results as of July 23, and 88% of them beat consensus estimates, which is above the five-year 75% average. Following the stock market rout on July 19, the benchmark indexes reported four consecutive days of gains. The Dow Jones Industrial Average closed above 35,000 for the first time on July 23, while the tech-heavy Nasdaq Composite gained 3.6% over the past five days to close at record 14,846.06 points.
With remote working expected to remain the norm in the near term amid the resurgence of COVID-19 cases in several countries, the technology industry is likely to grow substantially in the coming months. In addition, the rapid digital transformation of virtually all sectors is also expected to contribute to the tech industry's growth.
The stellar earnings growth and consequent momentum of industry-leading large-cap stocks have driven the Nasdaq Composite to record highs. Furthermore, this industry’s immense growth potential and growing investor optimism we think should propel cheap tech stocks Fujitsu Limited (FJTSY), Sharp Corporation (SHCAY), LG Display Co ., Ltd. (LPL), and SolarWinds Corporation (SWI) to fresh highs soon.