For Immediate Release
Chicago, IL – July 6, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Zoom Communications ZM, Fortinet FTNT, Qorvo QRVO, Zscaler ZS and Dropbox DBX.
Here are highlights from Thursday’s Analyst Blog:
Nasdaq Continues to Scale to New Highs: 5 Tech Stocks to Buy
With major global powers, including the United States, reopening their economies gradually, the tech-laden Nasdaq index continues to rally.
On Jul 1, the index reached a new record high —closing the trading session at 10,154.63, up 1%.Further, the index was up 48% from its lowest level of 6,860.67 on Mar 23, attained during the ongoing pandemic scenario. Furthermore, Nasdaq has gained 13.2% on a year-to-date basis.
Additionally, the index has surged more than 30% in second-quarter 2020, which marks its best performing quarter since 2001.
The progressive relaxation of stay-at-home restriction is driving economic activities in major sectors. However, among all the sectors, it is the tech sector that is fueling the index’s rally the most.
This particular sector has been extremely resilient to the impact of coronavirus (COVID-19)-induced disruptions on the back of advanced technologies including Artificial Intelligence (AI), Machine Learning (ML), Augmented Reality (AR), cloud computing, blockchain and robotics.
The Technology Select Sector SPDR (XLK) has gained 14.2% on a year-to-date basis, which is testament to the sector’s resilience. It has also outperformed the Nasdaq’s rally in the same time frame.
Further, the tech sector has witnessed a sequential gain of 30.1% in second-quarter 2020 driven by an uptick in demand for tech-ridden products and services owing to work-from-home and learn-from-home trends, which are continuously gaining momentum amid the current pandemic.
Technology Stocks’ Prospects
Solid rebound in consumer confidence remains encouraging for the tech companies, which have been making every effort to expand key offerings amid the ongoing pandemic situation.
Further, the introduction of Paycheck Protection Program (PPP) bodes well for the online payment companies including PayPal and Square. PPP has not only been bolstering the lending activities of these companies but also driving momentum across the small merchants.
Furthermore, growing proliferation of video conferencing software as a result of current work-from-home trend remains noteworthy. Most of the companies and government organizations now consider video conferencing as the definitive solution to continue work and production by connecting with employees remotely.
Also, cloud services that are helping organizations remotely process a lot of information, build and run crucial applications and services are witnessing rapid adoption.
Additionally, shifts in consumer preferences and business needs are leading to rise in demand for AR technology.
Moreover, growth in IoT, 5G deployment, autonomous vehicles, AR/VR and wearables and other connected devices, which are bolstering the adoption of blockchain technology and driving growth in the semiconductor industry remain encouraging.
Per the Zacks’ proprietary methodology, stocks with the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer solid investment opportunities.
Based on this, here we pick fivetech stocks that boast a perfect mix of elements and strong fundamentals. You can see the complete list of today’s Zacks #1 Rank stocks here.
Moreover, these stocks have a market capital of more than $5 billion.
Zoom Communications continues to add a record number of subscribers and expand its enterprise customer base amid the COVID-19-induced remote-working and online-learning wave. Easy to deploy, use, manage and scalability make Zoom Video’s software popular among customers. Moreover, this $73.1 billion-worth company’s efforts to eliminate the security and privacy loopholes are expected to aid it in maintaining its existing enterprise user base and attract more customers.
Zoom Communications currently has a Zacks Rank of 1 and a Growth Score of A. The consensus mark for fiscal 2021 earnings has been revised upward by 78.8% in the past 30 days to $1.18 per share.
Fortinet is positioned well to capitalize on rising demand for security and networking products amid the coronavirus crisis, which has compelled a huge workforce globally to work remotely. It is also benefiting from robust growth in Fortinet Security Fabric, cloud and SD-WAN offerings. Moreover, continued deal wins, especially those of high value, are key growth drivers for this company that is worth $22.5 billion.
Fortinet currently has a Zacks Rank #1 and Growth Score A. The Zacks Consensus Estimate for 2020 earnings has been revised upward by 1.5% to $2.81 per share in the past 30 days.
Qorvo is benefiting from the consistent solid demand for ultra-high band front end modules owing to the launch of next-gen 5G smartphones. In addition, this $12.39 billion company’s Bulk Acoustic Wave based multiplexers that enable advanced carrier aggregation are witnessing robust traction owing to their importance for the next-gen higher data-rate applications.
Qorvo has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its fiscal 2021 earnings is pegged at $5.57 per share, having been revised upward by 0.2% in the past 30 days.
Zscaler has been benefiting from a steady rise in demand for cloud security as the work-from-anywhere trend continues to gain momentum. Notably, this $14.42 billion-worth company’s unique offerings include four architectural advantages that firewalls cannot add. Moreover, the company’s Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access are well poised to gain adoption amid thriving remote work culture.
Zscaler has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for its 2020 earnings has been revised upward by 5% to 21 cents per share in the past 30 days.
Dropbox has been gaining from the evolving workspace demand for seamless enterprise communication tools. Further, solid demand for cloud storage, triggered by the coronavirus crisis led work-from-home wave has been acting as a tailwind for this company, which is worth $9 billion.
Dropbox has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for its 2020 earnings is pegged at 74 cents per share, having been revised upward by 1.4% in the past 30 days.
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