Market-beating results from tech giants Apple and Facebook last night have eased fears that the tech sector is in a bubble that is set to burst.
Both Apple and Facebook reported first quarter results after the US market closed last night and both firms significantly beat market expectations.
Apple’s results showed that it had experienced a 17 per cent rise in iPhone sales, which led to revenues of $45.6bn (£27.2bn), well above analysts’ expectations of $43.5bn.
Meanwhile, a significant expansion of Facebook’s mobile business drove the firm to a 72 per cent increase in revenues to $2.5bn.
The results saw the share price of both firms rise considerably in after hours trading.
The news also boosted UK-listed technology firms, with semiconductor manufacturer Imagination Technologies - which has contracts to supply Apple - rising by nearly 10 per cent this morning.
Specialist technology funds had been hit by a “brutal” sell-off in the sector earlier this month.
Walter Price, manager of the RCM Technology Trust, said the “dramatic” sell off for some technology stocks since the stat of March had been a “reality check” but said anyone suggesting it was the start of a long-term change in sentiment to technology was missing the tangible growth coming through in many tech stocks.
However, Mr Price said he had “reassessed” his portfolio and has “moved out of some positions in higher multiple companies where valuations looked over-extended” and are “likely to face challenges in the current environment of greater caution”.
He said he had increased his exposure to larger technology companies, which he said have been “largely untouched by the recent weakness” but insisted that he still maintained his “conviction” on the “the core, secular growth areas of technology”.
