Are These The Best Tech Stocks To Buy This Week?
Many tech stocks have outperformed the stock market over the past year. As a result, many investors now consider the tech space a defensive sector. But as investors continue to rotate from growth stocks to value stocks, some of the top tech stocks appear to be losing their luster. However, if you look at the bigger picture, both the S&P 500 and tech-heavy Nasdaq composite are still trading near their all-time highs. Expectations seem to be high as we approach a potentially impressive earnings season. Could this be why investors are looking to tech stocks?
Well, the hype for the current earnings season would be a factor to consider. After all, tech companies continue to provide for our needs across the board during the current pandemic. In fact, consumer tech giants Netflix (NASDAQ: NFLX) and Snap (NYSE: SNAP) will be reporting earnings this week. Sure, the duo is undoubtedly among 2020’s top tech stocks having entertained consumers thoroughly. With this being the case, some would argue that their upcoming earnings figures could be boosted by pandemic-related tailwinds. While this would provide short-term momentum for tech companies, the real question is whether they can maintain said momentum long-term.
For one thing, tech will likely remain a crucial component of the world around us today. It would also make sense for tech companies to be innovating and working hard to retain their customers overall. As a result, investors may be looking at tech stocks even amidst improving pandemic conditions. With all this in mind, here are four of the top tech stocks in the stock market today.
Top Tech Stocks To Buy [Or Sell] Right Now
- Square Inc. (NYSE: SQ)
- Facebook Inc. (NASDAQ: FB)
- Zoom Video Communications Inc. (NASDAQ: ZM)
- Applied Materials Inc. (NASDAQ: AMAT)
Square is a tech company that specializes in financial services and digital payments. The company enables its sellers to run and grow their businesses by providing a commerce ecosystem. In detail, it combines its intuitive software with affordable hardware to enable sellers to turn mobile devices and computing devices into payments and point-of-sale solutions. Impressively, its products help sellers make informed business decisions through analytics and reporting. SQ stock has been up by about 300% over the past year.
In February, the company announced its fourth-quarter and full-year 2020 financial results. Square reported a gross profit of $804 million for the quarter, a 52% increase year-over-year. Its Cash App delivered strong growth, enjoying gains of 162% year-over-year in gross profit at $377 million. In addition to that, the company’s Seller ecosystem generated a gross profit of $427 million, an increase of 13% compared to a year earlier.
Cash App was also able to acquire new customers and retain its existing base, with 36 million monthly transacting active customers. Square’s Seller ecosystem also continued to grow upmarket and attract omnichannel sellers. Omnichannel enables a cohesive experience between a seller and their customers across all interactions, whether online or in person. All things considered, will you add SQ stock to your portfolio?
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Facebook is focused on building tech products that enable people to connect and share. Specifically, its portfolio includes Facebook, Instagram, Whatsapp, and Messenger. Impressively, the company’s products empower over 3 billion people around the world. Also, over 200 million businesses use its apps to connect with customers and grow. FB stock currently trades at $302.44 as of 1:49 p.m. ET. Reports said the company has plans to announce a suite of new audio products today.
In January, the company announced impressive fourth-quarter and full-year 2020 financial results. In detail, the company reported that its daily active users increased by 11% year-over-year to 1.84 billion. It also reported a quarterly revenue of $28.07 billion for the quarter, a 33% increase year-over-year. Facebook also posted a net income of $11.21 billion and diluted earnings per share of $3.88.
Also, the company ended the year with $61.95 billion in cash and cash equivalents. The company has benefitted from two broad economic trends during the pandemic. The first would be the ongoing shift towards online commerce. The second would be the shift in consumer demand towards products and away from services. These shifts could have provided a tailwind to its advertising business. Given all of this, will you consider buying FB stock for the long term?
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Zoom Video Communications Inc.
Zoom is a communications technology company that provides video telephony and online chat services through its cloud-based peer-to-peer software platform. The platform unifies cloud video conferencing, online meetings, group messaging, and a software-based conference room system. Zoom today announced a $100 million Zoom Apps fund, a venture fund created to stimulate the growth of the company’s ecosystem of Zoom Apps. Portfolio companies will receive initial investments between $250,000 and $2.5 million to build solutions that will become core to how Zoom customers meet, communicate, and collaborate. ZM stock currently trades at $324.69 as of 1:49 p.m. ET.
Last month, the company reported its fourth quarter and fiscal year 202 financial results. In it, Zoom reported a total revenue of $882.5 million, a 369% increase year-over-year. The company also reported a fourth-quarter operating cash flow of $399.4 million, a staggering 993% increase year-over-year. Net income for the quarter was $260.4 million or a diluted earnings per share of $0.87. You could say that the fourth quarter marked a strong finish to an unprecedented year for Zoom.
Throughout the year, it had significantly scaled its business to provide critical communications and collaboration services to customers globally in response to the pandemic. With that in mind, will you consider buying ZM stock?
Applied Materials Inc.
Another top tech stock to watch now would be Applied Materials Inc (AMAT). For the uninitiated, AMAT supplies equipment, services, and software for the semiconductor manufacturing industry. Notably, the company’s core end markets include the consumer tech and renewable energy industries. In terms of clientele, AMAT caters to semiconductor giants such as Taiwan Semiconductor (NYSE: TSM) and Samsung (OTCMKTS: SSLNF). Now, even amidst the current global semiconductor chip shortage, investors continue to flock towards AMAT stock. We can see this as the company’s shares are currently up by over 50% year-to-date. Could this pick-and-shovel play on the semiconductor tech industry be worth investing in now?
If anything, the company has not been resting on its laurels lately. Earlier this month, AMAT unveiled a new platform to bolster its existing offerings. According to AMAT, the Actionable Insight Accelerator keeps track of semiconductor processes in real-time, optimizing the quality of chips produced.
Moreover, the platform supposedly works across all of AMAT’s equipment and related systems. As semiconductor manufacturers are gearing up to meet rising chip demands, this is a strategic move by AMAT. On top of that, the company also revealed plans to more than double its earnings per share by fiscal 2024 in a recent investor meeting. With the company firing on all cylinders, would you consider AMAT stock a buy now?