Come Monday, the tech-heavy Nasdaq will try to kick-off its second positive week in a row. But it's poised to do so without small cap tech and Chinese internet companies.
According to veteran market watcher Nicholas Colas, much of Wall Street is mistakenly assuming that the technology sector's big surge is broad-based.
"It's largely a large cap phenomenon," the DataTrek Research co-founder said Friday on CNBC's "Trading Nation."
The Nasdaq is now up almost 25 percent over the past 52-weeks, while the broader S&P 500 is up 16 percent in that same period. Yet Colas noted that only a handful of super-sized tech companies — such as Amazon and Apple — have been instrumental in pushing the group higher.
"Large cap tech is up 17 percent. It's roughly half of the S&P's gains [year-to-date.] You can throw in Amazon and you get 70 percent of the S&P's gains for the year," he said. "But, for example, in small cap, the S&P 600, tech is actually underperforming."
"Looking internationally, for example, the tech narrative even falls apart there," he said. "China has almost as vibrant a market for internet and tech as we do, names there are down an average of 23 percent year-to-date."
Even though Colas detects pockets of pain in tech, he predicts momentum will continue to drive large U.S. cap tech names higher this year. He's not worried about valuations due to the bullishness of the economic cycle.
"We're still positive on large cap tech names," Colas said. "For the balance of the year, momentum seems very strong."