Technology stocks had a prolific run in 2017, courtesy of the rapid adoption of cloud-based platforms, increasing demand for Artificial Intelligence (AI) tools and significant progress in developing advanced driver assisted system (ADAS) solutions.

Moreover, Augmented/Virtual (AR/VR) reality devices became part of the mainstream technology market driven by significant investments from tech bigwigs — Apple, Microsoft, Samsung and Facebook.

Further, Internet of Things (IoT) technology made rapid strides in 2017. Consumer as well as industrial products and machines were embedded with sensor technology to process data or interact with other electronic devices.

According to latest Earnings Trend, technology sector’s fourth-quarter earnings are expected to improve 14% from the same period last year on 8.5% higher revenues.

Semiconductors Biggest Gainers

Semiconductors are primarily gaining from strong demand for power-efficient and high-performance chips. These are essential to run cloud-data centers and process massive data by using IoT analytics, machine learning and deep learning applications.

Moreover, the rapidly expanding IoT market is driving growth for chip components to power applications, particularly ADAS, medical/healthcare and smart devices. Further, rapid development of 5G platform and technology has evolved as another catalyst for semiconductor providers.

We believe that these emerging trends have provided much needed opportunity to semiconductor companies to offset loss of business due to the shrinking PC market which still consumes bulk of chips.

According to Gartner’s latest data, PC shipments in the quarter were down 2% year over year to 71.6 million units. The downside marked the 13th straight quarter of year-over-year fall, which is the longest duration of decline in the history of the PC industry.

However, IDC’s data contradicted Gartner’s figures due to different techniques used for tracking PC sales as well as the inclusion and/or exclusion of certain products. According to IDC, PC shipments touched 70.6 million units, marking year-over-year growth of 0.7% and outperforming the research firm’s previous prediction of a fall of 1.7%.