The technology sector has encountered headwinds in recent weeks, amid data privacy scandals and talk of trade war. Below, I’ll explain why you shouldn’t be concerned. The chief source of optimism: first-quarter earnings, which are projected to be strong for the S&P 500 and tech shares in particular.

Before we get to the sublime, let’s first examine the ridiculous.

Facebook (NSDQ: FB) CEO Mark Zuckerberg’s testimony before Congress last week was something of a joke. The Zuckerberg circus on Capitol Hill didn’t help the sentiment of tech investors.

Instead of comporting himself as the CEO of a multi-billion-dollar public company, Zuckerberg resembled an arrogant IT guy who was making a tech support call. His answers concerning the Cambridge Analytica data harvesting scandal were rather vague, if not misleading. He came off better than lawmakers, though, who betrayed an astonishing technological illiteracy. The upshot: Zuckerberg’s testimony was a non-event.

Meanwhile, President Trump has been attacking e-commerce giant Amazon (NSDQ: AMZN) for not paying state taxes (that’s false) and for costing the United States Postal Service billions of dollars (also false). Trump has been using Twitter, his favorite mode of communication, to excoriate Amazon.

Trump’s real agenda, of course, is to wound Amazon CEO Jeff Bezos, because Bezos owns The Washington Post, which has been a thorn in the president’s side. Bezos is rich enough to simply buy Twitter and shut it down — now there’s an idea that might improve civil discourse.

Add it all together and tech investors have been skittish. Will new regulations come down the pike to impinge on the tech sector’s profitability? Are the business models of social media companies under threat? Will the FAANG coterie lose steam?

Sound and fury…

Here’s my advice: ignore the media’s sound and fury. It signifies little.

Yes, you should elevate cash levels in your portfolio. Rising interest rates and inflation pose risks to stocks as a whole. But the tech sector is in fine fettle. Tune out the white noise and stick to the fundamentals. Indeed, the FAANG stocks, of which BTP holding Alphabet (NSDQ: GOOG) is a member, have all bounced back.

Congress is unlikely to pass regulations that hurt the tech sector. The GOP-run Congress is stoutly laissez-faire and regulation averse. But the strongest reason for optimism is the earnings outlook for technology firms.

According to the analyst consensus, first-quarter earnings for the tech sector are expected to increase 20.7% on a year-over-year basis, on the strength of an 11.4% jump in revenue. On a full year basis, technology is projected to rack up 17.3% earnings growth in 2018, higher than the earnings growth of 15.8% posted in 2017.

These numbers outpace the S&P 500, which is nonetheless expected to turn in a stellar first quarter. The estimated earnings growth rate for the S&P 500 in the first quarter is 17.3%. The consensus among analysts is that the S&P 500 will see a 16.2% increase in price over the next 12 months.

For the first quarter, with 6% of the S&P 500 reporting results so far, 70% of companies have reported a positive earnings per share (EPS) surprise. All 11 S&P 500 sectors are reporting or are expected to report earnings growth for the second straight quarter.

Spending in the tech sector was expected to increase in 2018, even before the tax cut bill was signed by President Trump in December. Tax cuts only add rocket fuel to the tech sector’s strong position.

Additional growth drivers for technology include mega-trends with unstoppable momentum, such as artificial intelligence, cloud computing, big data, autonomous vehicles, and virtual/augmented reality. The table is set for out-performance in 2018.

BTP Stocks to Watch

On the earnings front, keep an eye on these BTP stocks, which boast especially strong projected results:

• Alphabet (NSDQ: GOOG)

The consensus EPS forecast for the quarter is $9.21. The reported EPS for the same quarter last year was $7.73.

• Amphenol (NYSE: APH)

The consensus EPS forecast for the quarter is 80 cents. The reported EPS for the same quarter last year was 71 cents.

• BioTelemetry (NSDQ: BEAT)

The consensus EPS forecast for the quarter is 27 cents. The reported EPS for the same quarter last year was 16 cents.

• IAC Interactive (NSDQ: IAC)

The consensus EPS forecast for the quarter is 38 cents. The reported EPS for the same quarter last year was five cents.

• Immersion (NSDQ: IMMR)

The consensus EPS forecast for the quarter is 65 cents. The reported EPS for the same quarter last year was minus 35 cents.

• Taiwan Semiconductor Manufacturing (NYSE: TSM)

The consensus EPS forecast for the quarter is 60 cents. The reported EPS for the same quarter last year was 54 cents.

• Texas Instruments (NSDQ: TXN)

The consensus EPS forecast for the quarter is $1.11. The reported EPS for the same quarter last year was 89 cents.

• Western Digital (NSDQ: WDC)

The consensus EPS forecast for the quarter is $2.97. The reported EPS for the same quarter last year was $2.07.

First-quarter earnings for our portfolio holdings will soon start pouring in. I’ll cover these operating results in future portfolio updates, with adjustments to my buy-sell-hold advice as warranted.

John Persinos is chief investment strategist of Breakthrough Tech Profits.