Tech sector Q2 gainers & losers: Seagate Technology tops, while Enphase Energy becomes worst performer

The second quarter was marked by a turbulent market sentiment as investors tried their best to gauge President Donald Trump’s economic policies. Many were worried that Trump’s tariffs might have inflationary consequences.

Markets got increasingly concerned after geopolitical tensions in the Middle East escalated.

However, as the quarter came to a close, investor concerns eased, with the signing of trade deals igniting hope of economic recovery. Let’s take a look at the information technology sector’s performance over the quarter.

The Technology Select Sector SPDR Fund ETF (NYSEARCA:XLK), which tracks the S&P 500’s information technology sector, rose more than 21% in the second quarter, compared to an over 10% rise in the benchmark S&P 500 Index.

Industries Q2 Performance

The Software & Services sub-sector rose more than 25% in the last quarter, while the Technology Hardware & Equipment sub-sector saw a loss of more than 2%. Meanwhile, the Semiconductor & Semiconductor Equipment industry rose more than 41% in the April-June quarter.

U.S. stock fund flow in and out of the sector was mostly stable throughout the quarter, with an increased inflow and outflow in the months of May and June. The Information Technology-focused ETF had a net inflow of $859.88M.

Top 5 movers of Q2:

Gainers:

Seagate Technology (NASDAQ:STX) +69.96%

Broadcom (NASDAQ:AVGO) +62.99%

Jabil (NYSE:JBL) +60.38%

Palantir Technologies (NASDAQ:PLTR) +58.79%

Western Digital Corp (NASDAQ:WDC) +57.53%

Losers:

Enphase Energy (NASDAQ:ENPH) -35.69%

Fiserv (NYSE:FI) -20.23%

Global Payments (NYSE:GPN) -17.92%

HP Inc (NYSE:HPQ) -12.33%

Apple (NASDAQ:AAPL) -5.84%

What Quantitative Measures say?

Seeking Alpha’s Quant rating has given XLK a BUY rating, with a score of 4.14 out of 5. The rating system has given the technology sector tracking fund an A+ in expenses and liquidity, and a D+ on risk.

What do analysts expect?

According to a FactSet analysis, at the sector level, the Information Technology sector had the highest number of companies issuing positive EPS guidance of all 11 sectors in the second quarter.

However, this sector also saw the largest increase in the number of companies issuing negative EPS guidance for Q2 relative to its 5-year average at +8.

At the sector level, analysts are most optimistic about the Energy, Communication Services, and Information Technology sectors, as these three sectors have the highest percentages of Buy ratings.

Seeking Alpha analyst, The Alpha Analyst has rated the technology sector tracking fund HOLD. The analyst believes that XLK’s high concentration in volatile large caps like NVIDIA and Apple and the exclusion of defensives like Amazon and Google weaken its appeal as a stable tech allocation.