These Tech Stocks Are In Focus For Q4 2020
Tech stocks have had an astounding year so far. This is despite the setbacks of the COVID-19 pandemic and ongoing US-China trade war. With our news outlets being cluttered with new tech offerings and services, it is hard to navigate through this myriad of top tech stocks. How do we know which of them stands out and are they worth our attention?
We human beings are great at adapting. This is second nature to us as we have shown to overcome adversity time and again. At the beginning of the year 2020, stock markets all over the world crashed as a devastating pandemic plagued the world. In retrospect, tech companies are thriving again 10 months into 2020. Companies have implemented work from home procedures and adjusted to push their businesses online. With that, more people are staying at home and tech companies have seized the opportunity to capitalize on this fact.
In fact, companies like Adobe (ADBE Stock Report) and Microsoft (MSFT Stock Report) have all had substantial gains in their share price since the COVID-19 pandemic struck. Adobe, through its Software as a Service (SaaS) model, has had a surge in revenue through its creativity software. Similarly, Microsoft has also switched over to a SaaS model for its famous productivity software, Office. Both companies capitalized on the pandemic and now have surges in sales and customers. Essentially, tech companies who persevered through the pandemic are now being rewarded. With that in mind, let us look at the tech companies that could present an opportunity for investors today.
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Top Tech Stocks To Buy [Or Avoid] Now: Zoom Video Communications
One stock that stands out is Zoom Video Communications (ZM Stock Report). Zoom is world-class video telephony and online chat services, provider. This stock appears to be the go-to stock in this pandemic and is clearly one of the biggest winners so far. The company provides video conferencing services that have become virtually indispensable in both business and personal settings. Its services allow people to carry out business as usual during the pandemic.
Zoom’s revenue has shot up 355% year-over-year to $663.5 million, beating analysts’ estimates of $500.5 million. The company ended Q2 2020 with over 370,000 customers, a significant growth rate of 458%. These numbers are staggering and are likely to fuel Zoom’s revenue for the years to come. Even with a vaccine around the corner, this new norm is likely to stay. This is because even when the economy reopens, many people will continue to work and learn from home. If businesses and classes could be carried out online in the last 10 months, it could potentially replace the need for face to face interactions and dealings.
With an increase of more than 600% in share price year-to-date, this tech company is performing superbly. As the company has a wide array of products and services, Zoom still has the potential to increase its share price by many folds. CEO Eric Yuan is also shown to be an exemplary leader, who has also overcome many adversities to get to his position today. Company leadership is an important metric for investors to evaluate a stock’s potential. And in Zoom, you get an outstanding leader. With all that in mind, would you say that Zoom is one of the investors’ favorites among tech stocks to buy?
Top Tech Stocks To Buy [Or Avoid] Now: PayPal
Another tech stock to watch is PayPal (PYPL Stock Report). PayPal operates a worldwide online payment system that supports online money transfers. It also serves as an electronic alternative to traditional paper methods like checks and money orders. The company has enjoyed a surge this year as well, showing a 76% increase in share value year to date. The reason being that more people and businesses are opting for cashless transactions to limit the spread of the insidious virus.
Customers have been shifting from cash to digital payments, which contributed to the boost in PayPal’s business. On top of that, the company has reached record growth for new accounts this year. By introducing new services and products such as QR codes for payments, PayPal is diversifying its revenue sources. It also recently launched an installment payment program called Pay in 4, which allows customers to pay in installments, interest-free.
Through its Q2 2020 financial updates, the company saw revenue growth of 25%, up to $5.25 billion. Its active user accounts have also spiked to 346 million, a 21% increase year-to-year. This props PayPal for solid earnings and revenue as its expanding user base continues to use its services.
Top Tech Stocks To Buy [Or Avoid] Now: AMD
Advanced Micro Devices Inc. (AMD Stock Report) has also had a successful year so far. AMD competes with the who’s who of semiconductor chips, Intel (INTC Stock Report), and Nvidia (NVDA Stock Report). The company’s stock price had surged 12.5% in heavy trading on July 29th after announcing its Q2 results. Its strong Q2 results were led by record notebook and server processor sales. AMD’s flagship Ryzen desktop processors’ revenue doubled from more than a year ago and shows no signs of stopping. With more people staying at home to work and games, this contributes to AMD’s revenue increase.
AMD is expecting full-year sales to rise by 32% from 2019, driven by their strength in their PC, gaming, and data center products. Its CEO, Lisa Su said that despite macroeconomic uncertainty gripping the world, the company has raised its full-year revenue outlook. This is supported by the company’s growth in businesses in multiple markets. Along with earnings of 18 cents a share on sales of $1.93 billion in Q2, AMD’s sales increased by 26%.
As the US-China trade war rages on, the two superpowers are trading sanctions and economical restrictions between one another. Despite having a blanket ban of US companies from selling its products to China, AMD has recently gained license approvals. The license will allow the company to continue selling PC and server CPUs to Huawei. Now that AMD will continue earning revenue from one of the biggest economies in the world, is AMD one of the best tech stocks to buy right now?