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Alphabet And Meta Eclipse Dot-Com Era Records With Historic 184% Sector Rally In Three Years

Benzinga · 5d ago

The S&P 500 Communication Services sector is currently staging the most aggressive three-year run in stock market history, officially surpassing the speculative frenzy of the 2000 Dot-Com Bubble.

Shattering Historical Precedents

The U.S. technology sector is witnessing a run that analysts are calling “unprecedented.” According to new market data highlighted by The Kobeissi Letter, the S&P 500 Communication Services sector has rallied 184% over the last three years.

This performance represents the strongest three-year gain on record for the sector, decisively beating the previous benchmark of 155% set at the height of the tech bubble two decades ago.

Visual analysis of the sector's Rate of Change (ROC), as highlighted in the chart shared by Kobeissi, indicates that the velocity of this current move is unlike anything observed in modern trading history.

While the Dot-Com era was defined by speculative excess, the current trend reflects a more sustained, albeit vertical, trajectory that has rewritten the record books.

Mega-Cap Tech Leads The Charge

This historic momentum has been fueled almost entirely by the sector's largest constituents following the 2022 market downturn. Since the bear market lows of 2022, the sector has rallied nearly 200% in total.

This resurgence is primarily attributed to two industry titans: Meta Platforms Inc. (NASDAQ:META) and Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG).

Meta has spearheaded the recovery with a staggering return of 588%, while Alphabet has contributed a robust 259% gain, respectively.

These two giants have provided the heavy lifting necessary to propel the broader index, masking softer performance in other areas of the market with their triple-digit returns.

Breaking The 2000 Ceiling

The implications of this rally extend well beyond short-term recovery. For decades, the March 2000 peak stood as a formidable historical ceiling for the tech and communications industry. That resistance has now been shattered.

As a result of the recent surge, the Communication Services sector index is now trading 39% above its March 2000 peak.

The S&P 500 Communication Services index has advanced 21.21% over the last six months and 28.97% over the last year. Here’s a list of a few ETFs that track the index.

Communication Services ETFs 6-Month Performance One-Year Performance
State Street Communication Services Select Sector SPDR ETF (NYSE:XLC) 9.65% 19.92%
Vanguard Communication Services Index Fund ETF (NYSE:VOX) 14.64% 22.97%
Invesco S&P 500 Equal Weight Communication Services ETF (NYSE:RSPC) 5.22% 16.64%

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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