Should We Still Invest In Tech Stocks Amid High Valuation?
Tech stocks have been having one of their best quarters since 2001. Since March, the Nasdaq Composite has increased more than 50% in a short span of a few months. Today, the technology industry is the best starting place for investors seeking explosive returns. Unless you have been living under a rock, you would have noticed that the overall technology industry has proven to be resilient amid the extreme challenges created by the pandemic.
Now that we enter a new earnings season, many companies will soon be reporting how they fared during the second quarter. Shares of technology companies have leaped ahead of the broader market. And many analysts believe such a phenomenon isn’t changing anytime soon. For sure, there are skeptics of the tech bull run, saying it’s similar to the dotcom bubble. In fact, some are starting to cash out ahead of the earnings report. This is out of fear that the earnings report might not live up to the expectations based on stock performance.
No matter how you slice it, tech stocks come in all forms. Some would definitely benefit far more than others, it all depends on which market the company is targeting. Products and services in e-commerce, gaming to video streaming, and video conferencing technology ensure that we can still live life in a somewhat normal way. The tech sector is going to start its earnings season with Netflix (NFLX Stock Report). The big question here is, can mega-tech stock like Netflix live up to its expectations? Assuming Netflix could beat consensus estimates once again, could this lead to fresh confidence among tech stock investors? With this in mind, here’s a quick list of tech stocks that could be an interest to you. Will they be the best stocks to buy before Friday? Let’s see.
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Best Tech Stocks To Buy Now [Or Sell]: Baozun
When it comes to the maturity of the e-commerce market, we know China tops the list. Shanghai-based Baozun (BZUN Stock Report) operates an e-commerce services platform. Its core services range from retail website creation services, marketing, and customer support for major Western brands looking to increase their footprints in the world’s second-largest economy. With the pandemic, online retail spending in China continues to grow at a rapid pace amid positive economic recovery from the pandemic. As reflected in its stock price, BZUN stock has climbed nearly 80% since the market crash in March.
While e-commerce could be huge, investors might also be interested in how the company is making money. Baozun generates services revenues from its enterprise customers. It also gets a cut of merchandise sales conducted through its platform. Baozun counts big brands like Nike (NKE Stock Report) and Microsoft (MSFT Stock Report) as its enterprise customers. All in all, if any western companies wish to extend their presence in China, Baozun could leverage its existing infrastructure to help clients grow their businesses in China. With all that being said, would this be the best e-commerce stock to watch in July 2020?
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Best Tech Stocks To Buy Now [Or Sell]: Glu Mobile
Video games have never been more popular. And strong performance amid the coronavirus pandemic has signaled that the video game industry could be a resilient growth industry. Glu Mobile (GLUU Stock Report) has turned out to be a winner this year. This came as Covid-19 related shutdowns have confined people to their homes to contain the spread of the disease. Compared to other game publishers, GLUU is still in the small-cap territory at roughly $1.6 billion at almost $10 per share. From the market sell-off in March, GLUU stocks have doubled in value. With a relatively low valuation, that leaves plenty of room for expansion if executed correctly.
The video game publisher ended its last quarter with a net cash position of roughly $115 million. On top of that, the company just completed a share offering that raised approximately $138.75 million. The strong cash position of the company allows the company to cushion through any short-term liquidity demand and utilize the proceeds to carry out more strategic acquisitions to enhance the company’s value. With a strong uptick in their game titles downloads and a stronger balance sheet than where it was a few months ago, could GLUU stock be worth adding to your portfolio?