Megacap technology stocks like Amazon.com Inc., Microsoft Corp. MSFT and Apple Inc. have outperformed the broader market by the widest margin in years following the collapse of Silicon Valley Bank and two other U.S. lenders.
According to an analysis by Alex Atanasiu, a portfolio manager at Glenmede Investment Management, investors scrambling into the perceived safety of megacap technology names caused the cap-weighted S&P 500 index to outperform the average S&P 500 constituent stock by more than 3% last week. That streak came to an end on Monday when the S&P 500 SPX outperformed the Nasdaq 100 and Nasdaq Composite COMP . However, the Nasdaq outperformed both the S&P 500 and Dow Jones Industrial Average DJIA once again on Tuesday.
The Nasdaq Composite managed to outperform the Dow DJIA by 4.6% during the week ended Friday, its widest margin of outperformance since March 20, 2020, according to Dow Jones Market Data. These companies also tend to have relatively low debt burdens, lots of cash on hand, reliable income streams, and management teams that are trusted by Wall Street, Hogan pointed out.