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After a rough showing last year, technology stocks have busted out of the gate strong in 2023, undoubtedly a welcomed development among investors.
A hawkish Fed, geopolitical uncertainties, and inflation all contributed to the sector’s poor performance, with investors facing volatility throughout the year.
However, with sentiment shifting following better-than-expected economic data, buyers have finally returned after a long hibernation.
Three technology stocks – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have stopped for nobody so far in 2023, all up more than 15% year-to-date.
Image Source: Zacks Investment Research
In addition, all three have seen their earnings outlooks drift higher as of late, providing the fuel shares need to continue their runs. Let’s take a closer look at each one.
Jabil Inc.
Jabil provides electronic manufacturing services and solutions to its customers, currently boasting a Zacks Rank #2 (Buy).
The company’s latest quarterly release on December 15th has helped lift shares; JBL exceeded the Zacks Consensus EPS Estimate by nearly 5% and reported revenue 4% above expectations thanks to the strong execution of its operational plans.
In fact, it was the company’s fifth consecutive quarter of exceeding both earnings and revenue estimates.
Image Source: Zacks Investment Research
Further, JBL shares provide exposure to technology paired with an income stream; JBL pays a modest dividend, currently yielding 0.4% with a sustainable payout ratio sitting at 5% of its earnings.
Image Source: Zacks Investment Research
Salesforce
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, enabling organizations to better manage critical operations.
Activists have been circling CRM recently, pushing for the company to improve its margins which has provided a big boost for shares.
Analysts have upped their outlook across all timeframes as of late, landing Salesforce into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Following the challenging price action in 2022, CRM’s valuation multiples have taken a step back; the company’s forward price-to-sales ratio sits at 4.9X, well beneath the 7.8X five-year median and steep highs of 9.5X in 2022.
Image Source: Zacks Investment Research
NetEase
NetEase is a Chinese internet technology company engaged in the development of applications, services, and other technologies. Presently, NTES is a Zacks Rank #2 (Buy).
Similar to JBL, NetEase rewards its shareholders via its annual dividend that currently yields 1.9%, nicely above the Zacks Computer and Technology sector average.
Notably, NetEase’s payout has grown by more than 30% over the last five years.
Image Source: Zacks Investment Research
NetEase reported strong results in its latest quarter, exceeding the Zacks Consensus EPS Estimate by a sizable 42% and reporting revenue modestly ahead of expectations.
Impressively, the average EPS beat across its last four releases is 34%. As we can see in the chart below, investors certainly cheered on the latest quarterly release.
Image Source: Zacks Investment Research
Bottom Line
With sentiment slowly shifting following some better-than-expected economic data, buyers are finally revisiting technology stocks.
Of course, nobody has a magic crystal ball that tells us where the sector heads next, but we’re certainly off to a far better start compared to 2022.
All three stocks above from the Zacks Computer and Technology Sector – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have been no exception to the sector’s great start, all up more than 15% year-to-date.
In addition, all three have seen their earnings outlooks drift higher as of late, providing the cherry on top.
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These 3 Tech Stocks Are Already up 15% In 2023
After a rough showing last year, technology stocks have busted out of the gate strong in 2023, undoubtedly a welcomed development among investors.
A hawkish Fed, geopolitical uncertainties, and inflation all contributed to the sector’s poor performance, with investors facing volatility throughout the year.
However, with sentiment shifting following better-than-expected economic data, buyers have finally returned after a long hibernation.
Three technology stocks – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have stopped for nobody so far in 2023, all up more than 15% year-to-date.
Image Source: Zacks Investment Research
In addition, all three have seen their earnings outlooks drift higher as of late, providing the fuel shares need to continue their runs. Let’s take a closer look at each one.
Jabil Inc.
Jabil provides electronic manufacturing services and solutions to its customers, currently boasting a Zacks Rank #2 (Buy).
The company’s latest quarterly release on December 15th has helped lift shares; JBL exceeded the Zacks Consensus EPS Estimate by nearly 5% and reported revenue 4% above expectations thanks to the strong execution of its operational plans.
In fact, it was the company’s fifth consecutive quarter of exceeding both earnings and revenue estimates.
Image Source: Zacks Investment Research
Further, JBL shares provide exposure to technology paired with an income stream; JBL pays a modest dividend, currently yielding 0.4% with a sustainable payout ratio sitting at 5% of its earnings.
Image Source: Zacks Investment Research
Salesforce
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, enabling organizations to better manage critical operations.
Activists have been circling CRM recently, pushing for the company to improve its margins which has provided a big boost for shares.
Analysts have upped their outlook across all timeframes as of late, landing Salesforce into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Following the challenging price action in 2022, CRM’s valuation multiples have taken a step back; the company’s forward price-to-sales ratio sits at 4.9X, well beneath the 7.8X five-year median and steep highs of 9.5X in 2022.
Image Source: Zacks Investment Research
NetEase
NetEase is a Chinese internet technology company engaged in the development of applications, services, and other technologies. Presently, NTES is a Zacks Rank #2 (Buy).
Similar to JBL, NetEase rewards its shareholders via its annual dividend that currently yields 1.9%, nicely above the Zacks Computer and Technology sector average.
Notably, NetEase’s payout has grown by more than 30% over the last five years.
Image Source: Zacks Investment Research
NetEase reported strong results in its latest quarter, exceeding the Zacks Consensus EPS Estimate by a sizable 42% and reporting revenue modestly ahead of expectations.
Impressively, the average EPS beat across its last four releases is 34%. As we can see in the chart below, investors certainly cheered on the latest quarterly release.
Image Source: Zacks Investment Research
Bottom Line
With sentiment slowly shifting following some better-than-expected economic data, buyers are finally revisiting technology stocks.
Of course, nobody has a magic crystal ball that tells us where the sector heads next, but we’re certainly off to a far better start compared to 2022.
All three stocks above from the Zacks Computer and Technology Sector – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have been no exception to the sector’s great start, all up more than 15% year-to-date.
In addition, all three have seen their earnings outlooks drift higher as of late, providing the cherry on top.