5 Technology Stocks Powering S&P 500 ETF

The S&P 500 returned to positive territory in 2025, wiping out all its losses, led by technology stocks. The stunning comeback occurred just over a month after the market had tumbled to near bear market levels on April 8, courtesy of President Trump's aggressive tariff plans. Per Bespoke Invest, the S&P 500 erased its 15% year-to-date loss in less than six weeks, marking the fastest recovery since 1982 (read: S&P 500 Makes the Fastest Recovery Since 1982: 5 Best ETFs).

The 90-day U.S.-China trade truce and strong earnings, especially from tech giants, renewed market optimism.

SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, is up 0.4% this year. While many stocks powered the ETF, technology has been the clear leader in the latest leg of the rally. Here, we have highlighted five technology stocks that have led the way higher in the ETF over the past month and have a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold). These are Microchip Technology Inc. MCHP, Seagate Technology STX, Palantir Technologies Inc. PLTR, Micron Technology MU and Arista Networks Inc. ANET.

The solid trend is likely to continue in the months ahead as Wall Street strategists are turning increasingly bullish once again on the S&P 500 outlook for the year. Goldman Sachs raised its year-end target for the S&P 500 to 6,100 from 5,900. Yardeni Research also lifted its forecast to 6,500 from 6,000, implying an additional 11% gain from current levels. Both firms cited easing concerns over a major economic slowdown as a key driver behind their optimism.

April inflation and jobs data added another reason to cheer. U.S. inflation in April cooled to the lowest level since February 2021. The Consumer Price Index, which tracks a variety of costs throughout the economy, rose 2.3% year over year in April, down slightly from 2.4% in March. The softer-than-expected data bolstered the case for the easing by the Federal Reserve.

Meanwhile, April jobs data showed that the U.S. labor market remained resilient amid the tariff chaos. The economy added better-than-expected 177,000 jobs while the unemployment rate held steady at 4.2%, providing further assurance about the economy's health.

Let’s take a closer look at the fundamentals of SPY.

SPY in Focus

SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 6.7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors, with information technology, financials, and consumer discretionary accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has an AUM of $576.1 billion and charges 9 bps in fees per year. It trades in an average daily volume of 66 million shares and has a Zacks ETF Rank #2 with a Medium risk outlook (see:all the Large Cap Blend ETFs here).

Below, we have highlighted the abovementioned five best-performing stocks in the ETF.

Best-Performing Tech Stocks in SPY Over the Past Month

Microchip Technology develops and manufactures microcontrollers, memory and analog and interface products for embedded control systems, which are small, low-power computers designed to perform specific tasks. The stock has soared nearly 60% in a month and saw a positive earnings estimate revision of a couple of cents for the fiscal year (ending March 2026) over the past seven days. Its earnings are expected to decline 13% this fiscal year. Microchip Technology has a Zacks Rank #3 .

Seagate Technology is a leading provider of data storage technology and infrastructure solutions. The stock has jumped 44% in a month. It saw a solid earnings estimate revision of 30 cents over the past month for the fiscal year (ending June 2025) and has an estimated growth rate of 510%. Seagate Technology has a Zacks Rank #3 (read: Tech ETFs at the Forefront of the Current Market Rally).

Palantir Technologies builds and deploys software platforms for the intelligence community, principally in the United States. The stock has soared about 40% in a month. It saw solid earnings estimate revision of 3 cents over the past month for this year and has an estimated growth of 43.9%. Palantir Technologies has a Zacks Rank #3.

Micron Technology has established itself as one of the leading worldwide providers of semiconductor memory solutions. The stock was up more than 37% over the past month. It saw positive earnings estimate revision of 8 cents for fiscal year (ending Aug 2025) over the past seven days and has an estimated earnings growth of 433.1%. MU has a Zacks Rank #3.

Arista Networks is engaged in providing cloud networking solutions for data centers and cloud computing environments. The stock has gained about 37% in a month. It saw solid earnings estimate revision of 9 cents over the past month for this year and has an estimated growth rate of 12.78%. Arista Networks carries a Zacks Rank #2 . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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