These Tech Stocks Are Trending In The Stock Market Today Ahead Of Earnings
Tech stocks remain some of the most popular investments in the stock market. Although some investors continue to move money out of big tech and slowly reposition their holdings into cyclical stocks, not all agree that such rebalancing is a smart move. Why? Given the tech sector’s robust fundamentals, they might have another ace up their sleeves this week when they report earnings.
“Solid earnings from these companies could mean another rally in tech stocks. We believe the first-quarter earnings over the coming weeks will be a major positive catalyst for tech names.” – Daniel Ives, Analyst at Wedbush Securities.
While some companies are working on only one area of the tech industry, others have a broad range of products and services. Popular names like Zoom Video Communications (NASDAQ: ZM) may be a winner in the stock market today. But not many can feel completely confident in the company’s long-term trajectory when the pandemic is more under control. Investors looking for top tech stocks to buy should consider those with a strong moat of offerings. That makes them an ideal investment choice irrespective of the broader economic condition. With all these factors in consideration, here are four top tech stocks to watch ahead of their earnings this week.
Best Tech Stocks To Watch Right Now
- Facebook (NASDAQ: FB)
- Amazon (NASDAQ: AMZN)
- Apple (NASDAQ: AAPL)
- Microsoft (NASDAQ: MSFT)
Facebook’s V-shaped recovery since the 2020 March collapse has resulted in a new all-time high. This is clear as its platform continues to help billions of people worldwide stay connected with friends and family. If anything, Snap’s (NYSE: SNAP) powerful earnings last week were a positive sign of things for companies such as Facebook. That’s because the social media giant also relies heavily on digital advertising spending. Even at this time, FB stock price continues to march higher.
Despite struggles in early 2020 amid the pandemic, total revenue came in 22% higher to $86 billion year-over-year in its latest quarter. Most of the growth was a result of a 21% increase in ad revenue. Meanwhile, “other revenue” increased by 72%. This primarily came from VR-related revenue.
According to SunTrust Robinson analyst Youssef Squali, Facebook’s latest venture is about to propel it even further ahead. The company recently unveiled Facebook Shops, its new e-commerce arm. This would allow buyers and sellers to transact without ever leaving the Facebook ecosystem. Clearly, the company’s plan to diversify from its advertising revenue is picking up steam with its growing e-commerce plan and shifting consumer demands. Accordingly, these provided a tailwind for Facebook’s advertising and marketplace business. Considering all these, do you think FB stock can maintain its momentum ahead of its earnings release on April 28?
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Amazon
Amazon is an e-commerce giant that is based in Washington. The company is one of the most valuable brands in the world. It is also one of the largest online marketplaces by revenue and market capitalization. The company’s strength lies in its e-commerce platform and has been one of the biggest winners to come out of this pandemic. The company’s stock price is up around 5% year to date.
In February, the company posted its fourth-quarter financials. In it, Amazon posted net sales of $125.6 billion, a 44% increase year-over-year. It also ended the year with $31 billion in cash. Net income for the quarter increased by an impressive 118% to $7.2 billion. That staggering figure will be difficult to repeat. Yet, the outlook is optimistic for the company as it is slated to report its first-quarter earnings on Thursday, April 29.
When the company reports its Q1 earnings this week, investors will want to look at its net sales. The company is guiding for growth of 36% year-over-year. That is suggesting that we would start the first quarter with another $100 billion in revenue. Wall Street analysts are expecting Amazon to report revenue of $104.36 billion and earnings per share of $9.45. This implies a 38.3% and an 88.6% growth respectively. With such bullish estimates, AMZN stock hasn’t been moving much. Does that mean that the strong expectations have been priced in already? It could also be due to fears that growth may slow down after the pandemic as the economy reopens. In any case, AMZN stock could still be on an upward trajectory over the long term.
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Apple
Coming up next, we have tech goliath Apple. Safe to say, the company’s handheld electronic product line is a major household name. From its smartphones to its computers, the company’s comprehensive offerings continue to attract consumers. Hot off the press, Apple just announced its commitment to fund $430 billion in US investments over five years. This involves a new North Carolina campus and job-creating investments in innovative fields like silicon engineering and 5G technology. This signals Apple’s commitment to continue staying ahead in terms of innovation.
Apple is expected to increase its dividend and authorize further stock buybacks after announcing fiscal second-quarter earnings on April 28. The company typically makes updates to its capital-return program alongside its March-quarter report. And the coming announcement could be a driver of Apple’s post-earnings stock momentum.
Apple recently introduced several new products and services that should boost its growth. These include the AirTag tracking device and Apple Podcasts Subscriptions. Of course, there are also rumors that Apple could be launching augmented reality devices in the coming years. With such exciting developments, would AAPL stock see more gains as the year progresses?
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Microsoft
Last but not least, Microsoft is a tech company that develops, licenses, and supports a range of software products, services, and devices. In terms of software, the company is the developer of the world’s most prominent office software now, Microsoft Office. Aside from that, Microsoft is also a major player in the cloud computing space with its Microsoft Azure platform. No doubt, its comprehensive software portfolio has benefitted from both consumers and enterprises throughout the pandemic. With the company’s recent developments, I could see investors continue flocking towards MSFT stock.
The recent acquisition of Nuance Communications (NASDAQ: NUAN) for $16 billion dollars will expand Microsoft’s healthcare vertical. For the uninitiated, Nuance is a trusted cloud and AI software leader with decades of accumulated healthcare and enterprise AI experience. By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, the company will be able to empower healthcare providers through its clinical intelligence and other Microsoft cloud services.
Certainly, such an acquisition is yet another sign of Microsoft putting its deep pockets to good use. The company remains a solidly profitable business with a strong portfolio of products and services. With all these in mind, MSFT stock could be a good addition to your portfolio, even at today’s elevated valuation.
