4 Large-Cap Technology Stocks For Growth Investors
Zacks Investment Research | Dec 07, 2017 02:19AM ET
Technology continues to be one of the outperformers. In the year-to-date (“YTD”) period, NASDAQ Composite (“IXIC”) gained 25.9%. The Technology Select Sector SPDR ETF (“NYSE:XLK”) has climbed 28.9% YTD.
The sector is benefiting from increasing demand for cloud-based platforms as well as growing adoption of Artificial Intelligence (AI) solutions.
Huge demand for power-efficient as well as high performance chips, essential to run cloud-data centers and process massive data by using Big Data analytics, machine learning and deep learning tools has been a major driver for technology stocks.
Moreover, rapidly increasing demand for sensors and software for autonomous vehicles, advanced driver assisted systems (“ADAS”), Augmented/Virtual reality devices (AR/VR) and Internet of Things (IoT) are noticeable catalysts.
Why Go for the Large Caps?
Investing in large-cap companies is a safe bet, especially during economic downturns and stringent credit conditions. Many consider large-cap stocks an essential part of their portfolio, given the stability, healthy dividends and safety cushion they offer.
Why Growth Stocks?
Growth investors look for stocks with earnings and revenue increase relatively better than the market. This investment strategy comes with its fair share of risks, but it also brings the exciting possibility of outsized returns — an end goal that every investor desires.
Growth stocks can be some of the most exciting picks right now, as these stocks can capture investors’ attention, and yield big returns too. Today, we will discuss about some technology stocks, which have been performing well this year and have the potential to grow further in 2018.
Picking the Right Stocks
It’s a daunting task to bet on stocks, which are currently undervalued yet with high-growth potential. However, with the help of our new style score system, we have picked the stocks mentioned below that look promising based on their encouraging Zacks Rank and favorable Growth Style Score .
Our Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best investment opportunities in the growth investing space. You can see .
4 Solid Picks
DXC Technology Company (NYSE:DXC) is a result of merger between Computer Sciences Corporation and Enterprise Services Division of Hewlett Packard Enterprise which was concluded on Apr 1, 2017. It specializes in Information technology (“IT”) systems consulting — designing, developing, implementing, and integrating information systems.
Get The News You Want
The EPS estimate for the current year has been revised upward to $7.45 from $6.84 per share in the last 30 days. Also, based on the Zacks Consensus Estimate, DXC is expected to finish the current year with EPS growth of 140.2% and sales growth of 219.7%.
The stock sports a Zacks Rank #1 and has a Growth Style Score A.
Shares of the company have risen 58.5% on a year-to-date basis, outperforming the industry ’s increase of meager 31.6%.
NVIDIA Corporation (NASDAQ:NVDA) is a worldwide leader in visual computing technologies and the inventor of the graphic processing unit, which is a high-performance processor generating realistic, interactive graphics on workstations, personal computers, game consoles and mobile devices.
The EPS estimate for the current year has been revised upward to $4.19 from $3.61 per share in the last 30 days. Also, based on the Zacks Consensus Estimate, NVIDIA is expected to finish the current year with EPS growth of 62.9% and sales growth of 37%. That expansion is expected to continue next year, with current estimates anticipating earnings growth of 11.4% and revenue growth of 15.9%.
The stock flaunts a Zacks Rank #1 and has a Growth Style Score B.
Shares of NVIDIA have gained 77.9% year to date, substantially outperforming the 40.9% rally of the industry it belongs to.
Broadcom Limited (NASDAQ:AVGO) is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V based products.
Broadcom is witnessing upward estimate revisions — up 2 cents to $15.95 per share for current year in the last 30 days.
Based on the Zacks Consensus Estimate, Broadcom is anticipated to finish the fiscal year with EPS growth of 39.3%. This expansion is expected to continue next year, with current estimates anticipating earnings growth of 12.1% and revenue growth of 10.4%.
On top of this, Broadcom is currently a Zacks Rank #2 stock and has a Growth Style Score A.
Shares of Broadcom have gained 51.2% year to date, substantially outperforming the 34.1% rally of the industry it belongs to.
Vishay Intertechnology, Inc. (NYSE:VSH) is a producer of discrete semiconductors and passive electronic components. The company has a broad portfolio of solutions that are tailored to the “things” being controlled in the IoT, which has been a key growth catalyst.
The company carries a Zacks Rank #2 with a Growth Style Score of A. The company delivered positive surprises in three of the trailing four quarters with an average beat of 5.9%. Vishay is witnessing upward estimate revisions — up 2.9% to $1.41 per share for 2017 and 3.4% to $1.50 per share for 2018, respectively — in the last 60 days.
Based on the Zacks Consensus Estimate, we expect Vishay to finish fiscal 2017 with EPS growth of 65.9% and sales growth of 11.6%. That expansion is expected to continue next year, with current estimates anticipating earnings growth of an additional 6.1% and revenue growth of 6.1%.
Shares of Vishay have gained 33.1% year to date, outperforming the 31.9% rally of the industry it belongs to.
Conclusion
The above-mentioned large caps stocks have snatched the spotlight with impressive year-to-date returns, rising earnings estimates as well as strong growth projections. We believe that they are great picks for a winning portfolio in the short term.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.