The Vanguard Information Technology ETF (VGT) is, as I’ve noted before, a solid choice for those looking to invest in the tech sector. It offers ample exposure without being overly concentrated on just a few major players, unlike some other ETFs.
Even with the recent surge in tech stocks, the desire to invest in technology feels more urgent now than it has in a while. This shift is largely due to developments within the companies that comprise the ETF.
Why VGT is so attractive in today’s market
A major factor contributing to the ETF’s current allure is the earnings outlook for the sector. In recent years, many tech gains have stemmed from multiple expansions. While this can be effective short-term, it’s generally not sustainable over the long haul.
Looking ahead to 2026, the narrative will shift. Profit growth, rather than multiple expansions, will take center stage. This shift is likely to bring valuations down to more realistic levels, paving the way for a more sustainable market rally.
Currently, the Vanguard Information Technology ETF trades at around 25 times its last 12 months’ earnings. However, it’s worth noting that the tech sector is reporting a remarkable 50% year-over-year revenue growth. Even when excluding the largest players, Nvidia and Micron Technology, the growth rate stands at 28%.
Vanguard Information Technology ETF
Today’s changes
-2.21% $-2.54
current price
$112.65
Key data points
daily range
$112.20 – $113.31
52 week range
$73.76 – $115.62
volume
7.1K
A high valuation does have some justification if there’s revenue growth to support it. With earnings expected to grow by 40% in 2026 and another 26% in 2027, one could argue that a forward P/E ratio of 25 is, in fact, quite reasonable.
Why VGT is built for the future
The rise of artificial intelligence (AI) has been a clear driver of the revenue momentum we’re witnessing. But there’s still more to come.
The ETF’s leading mega-cap holdings, including Nvidia, Apple, Microsoft, Broadcom, and others, are at the forefront of the largest capital investment cycle in corporate history. Billions are being funneled into AI development, all aimed at satisfying a growing demand.
These companies aren’t just investing; they’re also seeing accelerated monetization. This dual thrust is what’s fueling the current revenue growth. Ultimately, that’s what propels stock prices upwards, and this momentum isn’t likely to let up any time soon.
Investing in the Vanguard Information Technology ETF is one of the best and simplest ways to tap into this trend now and for the foreseeable future.
