Are These The Best Tech Stocks To Trade This Week?
Tech stocks have performed well this year. The Nasdaq Composite has risen nearly 25% year-to-date. Since the index is tech and internet heavy, investors shouldn’t be surprised that the top tech stocks in the stock market are the major outperformer this year. However, the past couple of days saw choppy trading which has weighed on tech companies, with various stock market indexes falling up to 3%.
This could simply be because of the Big Tech earnings season this week. Although there hasn’t been any major news that could bring down the market, investors are keeping a laser focus on this sector. This is especially as it has risen so much this year. With the U.S. presidential election just one week away now, I would assume that investors would be quite concerned with a Democratic sweep in November. That could imply a threat of increased regulation from U.S. lawmakers. But that appears not to be the case. Investors continue to favor shares of Alphabet (GOOGL Stock Report) and Amazon (AMZN Stock Report) even with the polls moving further in Democrats’ favor.
Tech Stocks Could Still Deliver Huge Gains
No doubt, tech stocks of all sizes have seen their stock prices skyrocket this year. It’s easy to forget that stocks could move in two directions. After all, what we have been seeing is mostly just a one way street thus far. Here’s the thing, investors have to know that not all tech stocks are flying high today. Similarly, not all will continue to outperform in the coming years.
Looking ahead, investors with a longer-term horizon of a year or more might want to try to avoid timing the market. That way, it would be easier to find a few stocks that are worth buying now and that are worth holding in the long run. Staying invested over time usually won’t make investors lose money, considering the stock market’s return on average is about 10% annually. With all that in mind, do you have a list of top tech stocks to buy to prepare for the potentially huge growth over the next decade?
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Top Tech Stocks To Watch This Week: Zoom Video Communications
Zoom Video Communications (ZM Stock Report) videoconferencing platform has tapped perfectly into the work from home shift caused by the pandemic. The company has been enjoying staggering gains this year. Its stock price has been bucking the trend of the overall stock market. The stellar stock performance is hard to miss if you have been paying any attention to the markets. Year-to-date, the company has enjoyed a 653% increase in stock price, with the stock closing at $518 per share yesterday. The company expects to release its earnings on December 3.
In its second-quarter ended in July 2020, Zoom’s revenue shot up 355% year-over-year to $663.5 million. That exceeded analysts’ estimates of $500.5 million. The company ended Q2 2020 with over 370,000 customers, representing a significant growth 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. Well, businesses and classes have been carried out online in the last 10 months. Perhaps, Zoom could potentially replace or at least reduce the need for face to face interactions and dealings. Of course, I could be wrong. With the recent resurgence in cases, would you be thinking about ZM stock this week?
Top Tech Stocks To Watch This Week: Microsoft Corporation
Microsoft (MSFT Stock Report) will be the first company with a market cap above $1 trillion to report earnings this week. If you are looking for cheap tech stocks to buy, MSFT stock could fit the bill. It is one of the best cloud computing companies worth taking a closer look at. The company’s stock price is currently trading about 10 times its projected sales for the year ahead and 33 times forward earnings estimates. The quarterly earnings will be released after the closing bell today. Investors focusing on MSFT stock knew that the company has been trading sideways since hitting a high of $215.86 in early July.
The Wall Street consensus calls for revenue of $35.7. billion, up 8.2%, with profits of $1.54 a share. In the June quarter, Microsoft posted revenue of $38 billion, up 13% from the year-ago quarter. That crushed Wall Street’s consensus at $36.4 billion. Profits were $1.46 a share, ahead of the analysts estimate at $1.38.
Microsoft, as we all know, is incredibly profitable. Not to mention that it is a more diversified and lower risk cloud stock compared to specialists like Snowflake (SNOW Stock Report). With its Office productivity suite, leading Xbox gaming console, and popular Surface devices, there are various ways for the company to make money. To top it all off, its Azure cloud infrastructure platform currently serves as the foundation upon which many companies’ cloud operations are built upon. Azure has a huge opportunity for growth ahead. With all that being in mind, is MSFT stock a steal?
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Top Tech Stocks To Watch This Week: Nvidia
Nvidia (NVDA Stock Report) is well known for its graphics processing units (GPUs). The company has been having a stellar performance in the stock market this year. Currently valued at a share price of $526.25, the company’s stock price surged 119% year-to-date. With huge opportunities in areas such as edge computing platforms, healthcare, and gaming, the company has a vast opportunity for expansion.
Despite the gains this year, investors shouldn’t worry about the growth prospects of NVIDIA going forward. The company will be buying Arm Holdings for $40 billion. The deal could take about 18 months to complete. With that, NVIDIA will be in a position of strength in the massive smartphone chip market. You see, more than 90% of smartphones globally licensing Arm’s chip designs. The access to this new cash cow will help NVIDIA diversify its revenue further.
The company expects to report its third-quarter report on November 12. From its most recent quarter, Nvidia saw record revenue of $3.87 billion, up by 50% from a year earlier. Its data center division reported a revenue increase of 167%, up to $175 billion. Nvidia is on track for potential growth with its solid Q2 results. The company’s dominant position in GPUs, its expanding data center revenue, and purchase of Arm Holdings all make NVDA stock a top stock to watch for the years to come.