A sideways market and rising earnings are presenting opportunities not seen since ChatGPT first launched

A sideways market—one where major indexes trade in a relatively narrow range without a clear directional trend—combined with rising corporate earnings is creating conditions that Truist suggests haven't been seen since ChatGPT's launch first energized technology stocks. According to the firm, this backdrop amounts to a reset for the technology sector, making it more attractive on a relative basis compared with the broader market.

The logic rests on a simple relationship: when prices stall but earnings grow, valuations tend to compress. For technology, a sector that had commanded premium multiples, that compression can narrow the gap between what investors pay and what companies deliver. Truist's view implies the sector's recent underperformance may have moderated its valuation rather than damaged its fundamentals.

What to watch from here is whether earnings growth continues to hold up and whether the market's sideways pattern persists. If both conditions remain intact, the relative case for technology could stay in focus. Investors should also monitor whether any break in the range—up or down—changes the calculus, since relative attractiveness depends on both sides of the comparison.