Are These The Best Tech Stocks To Buy Right Now?
Tech stocks have been at the forefront of the markets for the last few years. The reason being that technology has been deeply intertwined in our lives. From communication to healthcare and entertainment, its involvement is undisputable. Since March, the Nasdaq Composite has been up by 64%, an all-time high since its inception. If you look at the 10 largest stocks in Nasdaq, 9 out of 10 of them are tech stocks. These 10 largest stocks account for about one-third of the index’s performance. With these numbers, you can see how well top tech stocks are performing.
As there is constantly new advancement in technology, these stocks do not look like it will slow down any time soon. Several tech stocks have already reached new highs that investors would never dream about. For newcomers and tech giants alike, the possibilities in this industry are endless. New tech companies are showing up every other day to show the latest offerings in technology. Old-timers like Intel (INTC Stock Report) and Amazon (AMZN Stock Report) continue to enhance the quality of services and products.
The technology industry has proven its resilience as shown in the last few months. Despite the COVID-19 pandemic causing a worldwide stock market crash, tech stocks have led the recovery in the markets. This could be an opportunity for investors looking into stocks that can deliver sustainable growth. With that in mind, let us dive into 3 tech stocks that have the potential for incredible gains.
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Tech Stocks To Buy [Or Sell]: Visa
Visa (V Stock Report), the world’s biggest payment solutions company has seen a rise of 48% of its share price since March. Despite the setbacks of the pandemic, the global payment company has shown resilience. Its resilience can be attributed to the fact that Visa has been making huge and consistent earnings, with double-digit revenue and annualized earnings growth in the last decade. The company has also shown that it is very efficient with its huge profit margins. Based on its fiscal third quarter, which ended on 30th June, it had an operating margin of 49%.
This would suggest why Visa’s stock price is still on the upswing, 10 months into the pandemic. Investors clearly recognize it as a highly efficient company with an excellent history of earnings growth. Thus, there is no surprise that they value the company at a P/E ratio of 37.45, which is higher than the industry’s average of 25.95. However, Visa, like most companies, has suffered a revenue decline in 2020 due to the pandemic. The company saw a 17% decline in revenue in its fiscal third quarter. It has since been on a rebound following the months into 2020.
In August, the payment volume at Visa had climbed 7% year-over-year, with spending bouncing back as people returned to work and school. This is testimony to how Visa can overcome its setbacks quickly and make an amazing recovery. Looking at the larger picture, Visa is leading the world into a cashless society. With electronic payment platforms, online retailers, and digital banks being adopted all over the world, the direction is clear. We are moving away from cash and into digital payments. Analysts are expecting most Asian and European countries to be cashless by 2030. And Visa could be one of the key beneficiaries of this. With that in mind, would you consider Visa to be an investor’s favorite tech stock to buy?
Tech Stocks To Buy [Or Sell]: Snap Inc.
Snap Inc (SNAP Stock Report) is another hot tech stock that has been under the radar for quite some time. This tech company is the owner of the popular social media application, Snapchat. The company’s attractive long-term potential in the software market seems to be rallying investors recently. Having enjoyed a 58% year-to-date increase in stock price, Snap has been enjoying the highs recently. The company is poised to make further gains as the company shows potential growth trends, both in the short and long term.
With the potential ban of TikTok in the US, there has been a noticeable exodus of users from TikTok over to Snapchat. Since Snapchat is also a short-video app, it stands to gain from the TikTok ban. Snapchat’s download trend in August had surged by 28.5 million new installs, its single largest month for first-time downloads since May 2019. This surge represented a 29% increase in downloads year-over-year in August 2020. It is incredible how one company’s predicament could be translated into another company’s opportunity for success.
Another feature that Snapchat has been improving is its advertisement functionality business. That is the company’s main source of income. By rolling out Dynamic Ads, it allows advertisers to automatically create ads in real-time, using the brand’s extensive catalog. This appeals to advertisers as they enable them to reach Snapchat’s user base more efficiently. Ultimately, this would increase advertisement revenue and directly impact its stock price as more consumers use Snapchat.
Tech Stocks To Buy [Or Sell]: Twilio
The tech company Twilio (TWLO Stock Report) has had a profound year so far. The cloud computing company’s share price has had a staggering 181% increase year-to-date. This makes it one of the top performers in the cloud computing sector. The company had pledged to a 30% or higher annual growth over the next four years, causing shares to surge by 20% in its last 5 trading sessions. Twilio recently announced its second-quarter results in August, much to investors’ delight. With total revenue of $400.8 million, up 46% year-over-year, and more than 200,000 active customer accounts, a 24% increase year-over-year, you can see why there is so much hype surrounding Twilio.
Last year, the company invested significantly in its R&D Center of Excellence and infrastructure. To have a business model that is geared to sustainable growth, the need for investments is more crucial than ever. As the saying goes, you need to spend money to make money. The company has also expanded its Internet of Things (IoT) offerings recently with the introduction of the Microvisor IoT Platform.
As more companies are shifting their businesses online, Twilio being a leading provider in infrastructure and communication tools for IT solutions, is in a very strategic spot. Being able to provide a business solution that can help businesses adapt to trying times will allow Twilio to reap the rewards in the months and years to come. As Twilio continues to prosper and deliver, is TWLO stock one of the best stocks to buy right now?