Tech Face Off: Amazon Vs. Alphabet ETFs

The technology sector is piping hot and leading the market rally this year buoyed by the surging FANG stocks. This is especially true as PowerShares QQQ (QQQ - Free Report) tacking the Nasdaq-100 Index has surged 21.1% from a year-to-date look compared with gains of 9.1% for the broad market fund (SPY - Free Report) and 7.3% for DIA.


Additionally, the emergence and extensive adoption of new technology such as cloud computing, big data, Internet of Things, wearables, drones, virtual reality devices, and artificial intelligence are fueling growth in the sector. The combination of other factors including improving global fundamentals, strong corporate earnings, a rising interest rate scenario, and Trump’s proposed corporate tax reform are acting as additional catalysts.

In particular, FANG stocks have gained more than 30% on average in the year-to-date timeframe with Amazon (AMZN - Free Report) and Alphabet (GOOGL - Free Report) recently joining the $1,000 club. Amazon is the fifth company and Alphabet is the sixth to have a quadruple digit price tag after Berkshire Hathaway's Class A shares BRK-A, Seaboard Corp. SEB, NVR Inc. (NVR - Free Report) and Priceline (PCLN - Free Report) .

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Amazon has surged 34.7% this year thanks to solid e-commerce sales and the fast-growing cloud computing business – Amazon Web Services. Additionally, the online e-commerce behemoth has started to make bigger moves into media and advertising and other streams of revenue generation by building air cargo hubs, leasing planes, purchasing trucks and designing drones. The ramp up of its brick-and-mortar business is also encouraging.

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