Technology stocks may no longer be the preferred option for U.S. investors. Over the last month, the Technology Sector SPDR (XLK) has become the highest decliner among the S&P 500 sectors, losing 5.2%. Additionally, the sector is down 1.5% year to date. Poor earnings results have been the nemesis for S&P 500’s largest sector this year.

But that doesn’t mean that stocks which make up nearly a fifth of the benchmark can be ignored outright. Most of the disappointment has stemmed from the earnings of behemoths whose impact overshadowed several smaller and better performers. This is why it makes sense to pick such tech stocks from the sector that have silently defied the trend.

How the Sector Paid for Dismal Earnings

Tech majors posted particularly dismal earnings for the first quarter, dragging the broader sector lower. Both earnings and revenues of International Business Machines Corporation (IBM – Analyst Report) registered a year-over-year decline. Further, Microsoft Corporation (MSFT – Analyst Report) reported lower-than-expected earnings results. Alphabet Inc. (GOOGL – Analyst Report) and Netflix, Inc. (NFLX – Analyst Report) have also posted dismal quarterly numbers.

However, the biggest disappointment for the sector was Apple Inc.’s (AAPL – Analyst Report) earnings numbers. But the big worry for investors was the decline in iPhone sales. Last week, the iPhone maker hit its worst closing level since Jun 2014, following concerns over a slump in iPhone sales.

As of May 13, nearly 81% of technology companies within the S&P 500 had reported earnings results. Total earnings of these companies are down 5.6% from the same period last year due to a mere 0.8% rise in revenues.

Size Does Matter

Excluding Apple, the sector’s Q1 earnings growth would be 0.8%. This makes it imperative to confront two challenges facing the sector. First, a few large companies have an outsized impact on the sector as a whole. Notable exceptions defying this trend are Facebook, Inc. (FB – Analyst Report) and Amazon.com, Inc. (AMZN – Analyst Report) which posted stellar results.