Shares surged as a wave of blowout AI earnings swept through the technology sector on August 4, pushing VGT up 3.1% to $118.70 and capping a blistering 9.7% climb from $108.20 just five trading days earlier. The rally was part of a dramatic turnaround that powered a $3.5 trillion increase in the Nasdaq 100's market capitalization in just four days. For VGT holders — sitting on a $146.6 billion fund that passively mirrors the entire U.S. information technology sector — the question is whether this earnings cycle marks a durable re-acceleration or a sugar rush.
Palantir's Monster Quarter Set the Tone for AI Software
Palantir posted $1.94 billion in quarterly revenue and lifted its full-year forecast to at least $8.15 billion — beating the consensus EPS estimate by over 46% and extending its beat streak to nine straight quarters.
U.S. commercial revenue rose 149% year over year.
The stock rallied 29% on the session , single-handedly proving that enterprise customers are still racing to spend on AI tools. That kind of demand signal lifts expectations for every software name in VGT's portfolio.
A Chipmaker's Guidance Showed AI Spending Isn't Slowing
ON Semiconductor beat estimates on both profit and revenue, posting adjusted EPS of $0.74 versus $0.71 expected, on $1.6 billion in sales. More importantly, management now expects AI data center revenue to "more than double in 2026."
Free cash flow quadrupled year over year to $425.4 million. For VGT, whose index includes dozens of semiconductor firms, this forward guidance matters more than the backward-looking beat — it tells investors that chip orders are accelerating, not plateauing.
The Broader Market Rally Adds Fuel but Also Caution
The surge wasn't only about tech; strong earnings and the prospect of a U.S.–Iran deal on the Strait of Hormuz sent stocks broadly higher.
The Nasdaq 100 jumped 9.3% in four days — its sharpest rally since April 2025 — snapping back from an 11% correction.
Analysts caution that valuations remain stretched and any hawkish surprise could trigger a pullback.
What VGT Shareholders Should Watch Next The fund's concentration in megacap tech means it rides or dies with AI spending momentum. Nerves about AI roiled markets earlier this summer , and another guidance miss from a major cloud or chip name could erase gains just as quickly. For now, the earnings evidence is overwhelming — but the price already reflects it.