FactSet's recent preview expects tech sector earnings growth of 44% for full-year 2026, roughly double that of the 22% growth forecast for the S&P 500. Goldman Sachs' 2027 earnings forecast currently calls for an additional 13% earnings growth in 2027, but it also notes that half of that is likely to come from artificial intelligence (AI) infrastructure beneficiaries.
In short, tech is going to continue driving the economy and the financial markets for the foreseeable future. If valuations remain reasonable, tech overweights could produce further outperformance.
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Of the two major ways to invest in the S&P 500 -- the Vanguard S&P 500 ETF (VOO +0.26%) and the Invesco S&P 500 Equal Weight ETF (RSP 0.11%) -- the one with the bigger tech allocation looks like the better bet.
The Vanguard S&P 500 ETF, which is market-cap-weighted, has a 35% tech allocation compared to just 19% for the equal-weight ETF. Also consider that the Invesco S&P 500 Equal Weight ETF rebalances quarterly. That means the current higher-than-average tech allocation it has, driven by the sector's big rally in the second quarter, is very likely about to drop.
As long as tech earnings growth is strong, I'd choose the Vanguard S&P 500 ETF.
