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4 Top-Ranked Tech Stocks Set to Crush Nasdaq in 2023
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The tech-laden Nasdaq Composite has been one of the top-performing indices in 2023, with more than 44% return as of Dec 26. It is on track to post the best yearly performance since 2009.
Tech’s outperformance has been the major driver. Robust performances from the “Magnificent Seven” — a term coined by Bank of America analyst Michael Hartnett — comprising Apple, Alphabet, Amazon, Meta Platforms (META - Free Report) , Microsoft, NVIDIA (NVDA - Free Report) and Tesla powered the index to soar this year.
The Select Sector SPDR Technology ETF (XLK) has gained 55% year to date, reflecting broad-based growth within the tech sector.
The growing proliferation of AI and machine learning has been a key catalyst. Spending on AI systems is expected to accelerate in 2024 as organizations continue to leverage AI as part of their digital transformation efforts.
The advent of generative AI has further attracted investments. The technology has already proven beneficial across a variety of industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy and utilities, and video game development.
Microsoft announced huge investments in OpenAI in January 2023. Google debuted AI-powered search and BARD in May 2023. Then again, NVIDIA’s market cap hit the $1-trillion mark in late May 2023 on AI euphoria, which boosted the demand for chips, benefiting semiconductor sales.
Per the latest data from the Semiconductor Industry Association (“SIA”), semiconductor sales in October were $46.6 billion, up 3.9% over September. SIA represents 99% of the U.S. semiconductor industry by revenues and nearly two-thirds of non-U.S. chip firms. The prospect for 2024 remains positive. The World Semiconductor Trade Statistics organization expects semiconductor sales to grow 13.1%, following an estimated 9.4% decline this year.
Tech stocks also benefited from the growing adoption of 5G, particularly fixed wireless access offerings from telecommunication companies in the United States. Augmented Reality and virtual reality devices picked up pace with the most notable launch of Meta Platforms’ Oculus 3.
The upcoming launch of Apple’s Vision Pro is expected to bring the technology mainstream in 2024.
Our Picks
Here we pick four technology stocks that are set to outperform the Nasdaq this year and have plenty of room to run.
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
CrowdStrike (CRWD - Free Report) is benefiting from the rising demand for cyber-security solutions due to a slew of data breaches, and the increasing need for security and networking products amid the growing hybrid working trend.
CRWD’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Acquisitions such as Bionic and Reposify are expected to fuel growth.
The Zacks Consensus Estimate for fiscal 2024 earnings has improved 4.2% over the past 60 days to $2.94 per share. CRWD shares have returned 144.9% year to date.
Crexendo (CXDO - Free Report) is riding on its expanding clientele. Its cloud communication platform’s user base has now exceeded four million globally.
Crexendo's recent introduction of its API 2.0 solidifies its position in cloud communication with innovative CPaaS capabilities and advanced AI features. CXDO launched a generative AI technology with ChatGPT integration in its Contact Center solution. This development enhances real-time, natural conversations, contributing to improved customer support, sales and internal communications.
The consensus mark for Crexendo’s 2023 earnings has increased 58.3% to 19 cents per share over the past 60 days. CXDO shares have surged 145.8% year to date.
Meta Platforms is benefiting from steady user growth across all regions, particularly the Asia Pacific. Increased engagement for its offerings, such as Instagram, WhatsApp, Messenger and Facebook, has been a major growth driver.
META is leveraging AI to recommend reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects.
Meta Platforms’ shares have returned 194.9% year to date. The Zacks Consensus Estimate for its 2023 earnings has improved 1.2% over the past 30 days to $14.32 per share.
NVIDIA is benefiting from growing investments in generative AI. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. Considering surging AI investments across the data center end market, NVDA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter.
NVIDIA is dominating the market for AI chips. The company’s GPUs are already being applied in AI models. This is expanding NVDA’s footprint in untapped markets like automotive, healthcare and manufacturing. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in autonomous vehicles and other automotive electronics space.
NVIDIA shares have surged 237.5% year to date. The consensus mark for fiscal 2024 earnings has jumped 14.4% over the past 60 days to $12.29 per share.
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4 Top-Ranked Tech Stocks Set to Crush Nasdaq in 2023
The tech-laden Nasdaq Composite has been one of the top-performing indices in 2023, with more than 44% return as of Dec 26. It is on track to post the best yearly performance since 2009.
Tech’s outperformance has been the major driver. Robust performances from the “Magnificent Seven” — a term coined by Bank of America analyst Michael Hartnett — comprising Apple, Alphabet, Amazon, Meta Platforms (META - Free Report) , Microsoft, NVIDIA (NVDA - Free Report) and Tesla powered the index to soar this year.
The Select Sector SPDR Technology ETF (XLK) has gained 55% year to date, reflecting broad-based growth within the tech sector.
The growing proliferation of AI and machine learning has been a key catalyst. Spending on AI systems is expected to accelerate in 2024 as organizations continue to leverage AI as part of their digital transformation efforts.
The advent of generative AI has further attracted investments. The technology has already proven beneficial across a variety of industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy and utilities, and video game development.
Microsoft announced huge investments in OpenAI in January 2023. Google debuted AI-powered search and BARD in May 2023. Then again, NVIDIA’s market cap hit the $1-trillion mark in late May 2023 on AI euphoria, which boosted the demand for chips, benefiting semiconductor sales.
Per the latest data from the Semiconductor Industry Association (“SIA”), semiconductor sales in October were $46.6 billion, up 3.9% over September. SIA represents 99% of the U.S. semiconductor industry by revenues and nearly two-thirds of non-U.S. chip firms. The prospect for 2024 remains positive. The World Semiconductor Trade Statistics organization expects semiconductor sales to grow 13.1%, following an estimated 9.4% decline this year.
Tech stocks also benefited from the growing adoption of 5G, particularly fixed wireless access offerings from telecommunication companies in the United States. Augmented Reality and virtual reality devices picked up pace with the most notable launch of Meta Platforms’ Oculus 3.
The upcoming launch of Apple’s Vision Pro is expected to bring the technology mainstream in 2024.
Our Picks
Here we pick four technology stocks that are set to outperform the Nasdaq this year and have plenty of room to run.
Image Source: Zacks Investment Research
These stocks have a favorable combination of a Growth Score of A and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
CrowdStrike (CRWD - Free Report) is benefiting from the rising demand for cyber-security solutions due to a slew of data breaches, and the increasing need for security and networking products amid the growing hybrid working trend.
CRWD’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Acquisitions such as Bionic and Reposify are expected to fuel growth.
The Zacks Consensus Estimate for fiscal 2024 earnings has improved 4.2% over the past 60 days to $2.94 per share. CRWD shares have returned 144.9% year to date.
Crexendo (CXDO - Free Report) is riding on its expanding clientele. Its cloud communication platform’s user base has now exceeded four million globally.
Crexendo's recent introduction of its API 2.0 solidifies its position in cloud communication with innovative CPaaS capabilities and advanced AI features. CXDO launched a generative AI technology with ChatGPT integration in its Contact Center solution. This development enhances real-time, natural conversations, contributing to improved customer support, sales and internal communications.
The consensus mark for Crexendo’s 2023 earnings has increased 58.3% to 19 cents per share over the past 60 days. CXDO shares have surged 145.8% year to date.
Meta Platforms is benefiting from steady user growth across all regions, particularly the Asia Pacific. Increased engagement for its offerings, such as Instagram, WhatsApp, Messenger and Facebook, has been a major growth driver.
META is leveraging AI to recommend reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects.
Meta Platforms’ shares have returned 194.9% year to date. The Zacks Consensus Estimate for its 2023 earnings has improved 1.2% over the past 30 days to $14.32 per share.
NVIDIA is benefiting from growing investments in generative AI. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. Considering surging AI investments across the data center end market, NVDA expects its fourth-quarter fiscal 2024 revenues to reach $20 billion from $6.05 billion in the year-ago quarter.
NVIDIA is dominating the market for AI chips. The company’s GPUs are already being applied in AI models. This is expanding NVDA’s footprint in untapped markets like automotive, healthcare and manufacturing. Collaborations with Mercedes-Benz and Audi are likely to advance NVIDIA’s presence in autonomous vehicles and other automotive electronics space.
NVIDIA shares have surged 237.5% year to date. The consensus mark for fiscal 2024 earnings has jumped 14.4% over the past 60 days to $12.29 per share.