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Technology has remained one of the favourite sectors among investors due to its ever evolving nature. The field is expected to accelerate faster than ever before. Therefore, if you invest right, you stand to make a nice profit. Tech companies will continue to change and reshape our world as the years pass. You don’t want to be left behind, so make sure you’re investing in quality tech stocks.
Below, we have evaluated two tech companies that have demonstrated remarkable share price performances so far. Both of these companies have raked in high returns for investors so far, and have the potential to keep exceeding expectations in the days ahead.
Widely known for its video gaming chips, NVIDIA has pioneered the art and science of visual computing. With a singular focus on this field, the company offers specialized platforms for the gaming, automotive, data center and professional visualization markets. Its products, services and software deliver amazing experiences in virtual reality, artificial intelligence and autonomous cars.
The stock has been clocking solid returns since the beginning of 2016 and has gained approximately 92% year to date. The robust performance is mainly because of the company’s phenomenal results in back-to-back quarters. This has boosted investor confidence in the stock substantially as many realized that the company is much larger than simply GPUs.
In the second quarter, the company posted earnings of 44 cents, much better than our estimate of 37 cents. This followed another massive beat by the company — 18.9% in the previous quarter — indicating that this stock is on fire.
NVIDIA’s foray into the autonomous vehicles and other automotive electronics space has been driving this stock higher since mid 2015. It should be noted that, during the last reported quarterly results, the company witnessed a 68% year over year jump in automotive segment revenues mainly driven by premium infotainment and digital cockpit features in mainstream cars.
Its plan to unveil new technology for self-driving cars is also encouraging. But the evolution of smart cars that can "see" for us, alert us to danger and even brake the car when we're not paying attention is just the beginning.
Notably, during the 2016 CES event, the company unveiled a computer chip called Drive PX 2 to power self driving cars. Drive PX 2 is considered to be as powerful as 150 MacBook Pros, and has the capacity to power 12 video camera inputs and sensor fusion. The chip, according to NVIDIA, can run about 24 trillion deep learning operations per second thereby enabling driverless cars to determine the next move in a fraction of a second.
While consumers are already using cameras to stay in a single lane, which has greatly reduced accidents, this is the not the main reason behind the development of this technology. It's in fact the statistics that show a dramatic rise in distracted driving and how some new auto technology like Automatic Emergency Braking (AEB) can prevent tens of thousands of rear-end collisions every year, saving countless lives. NVIDIA is also trying to revolutionize technology to make cars a safer means of getting around.
As long as the pace of development of automotive technology keeps up, we believe that this Zacks Rank #1 (Strong Buy) stock, with a long-term EPS growth estimate of 10.3%, will continue to rally.
Many would argue that NVIDIA with its hefty forward P/E valuation of 38.2x compared with the industry average of 17.5x is a risky bet. We beg to differ as hefty valuations and increasing share prices do not necessarily imply that the stock does not have much upside potential left.
Facebook Inc.
Facebook closed at $123.91 yesterday, trading near its last 52-week high of $128.33. Year to date, its shares have gained over 21%. The impressive performance on the trading front has largely been due to back-to-back outperformance in quarterly results. Stellar revenues from mobile ads and video efforts were primary growth catalysts.
Also, Facebook’s consistently and exponentially expanding user base continues to be one of its biggest strengths. Actually, this social networking site has an unparalleled user base of 1.71 billion monthly active users (MAUs). In addition, its mobile MAUs, Daily Active Users (DAUs) as well as Mobile DAUs exceed a staggering 1 billion. Besides great fundamentals, Facebook has equally strong prospects ahead.
Given that the company hit a jackpot with the monetization of Instagram, investors are now looking forward to how Facebook monetizes its other subsidiaries – Messenger, Oculus and WhatsApp. Recently, Messenger crossed the 1 billion user milestone. It is now the third 1 billion plus user platform owned by the company, close on the heels of Facebook and WhatsApp. Plus, Messenger’s bot platform reportedly boasts over 18K chatbots. Chatbots could serve as a powerful strategy to monetize the platform.
One of the biggest advantages enjoyed by Facebook is its leadership. The company’s CEO, Mark Zuckerberg has come a long way since his Harvard days. It’s his vision for the company that impresses us. At the F8 conference, Zuckerberg clearly highlighted his ambitions of expanding Facebook to something more than just a social network. He has outlined plans for the next decade, which lays solid emphasis on the AI and AR/VR technology. Both these technologies will likely emerge as the next big business opportunities.
We continue to believe that the Facebook juggernaut is unstoppable despite its fair share of challenges like a moderating ad revenue growth rate and increasing expenses. As a result, Facebook sports a Zacks Rank #1.
Therefore, despite the stock’s high forward P/E valuation of 39.5x compared with the industry average of 36.0x, we consider that it still has huge growth potential in the days to come.
Bottom Line
These two stocks have grabbed the spotlight with striking performances on the back of solid earnings results and strong growth projections. Keeping this in mind, we believe investing in either would yield strong returns for your portfolio in the short term.
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NVIDIA & Facebook: Two Best Tech Stocks Today
Technology has remained one of the favourite sectors among investors due to its ever evolving nature. The field is expected to accelerate faster than ever before. Therefore, if you invest right, you stand to make a nice profit. Tech companies will continue to change and reshape our world as the years pass. You don’t want to be left behind, so make sure you’re investing in quality tech stocks.
Below, we have evaluated two tech companies that have demonstrated remarkable share price performances so far. Both of these companies have raked in high returns for investors so far, and have the potential to keep exceeding expectations in the days ahead.
NVIDIA Corporation (NVDA - Free Report)
Widely known for its video gaming chips, NVIDIA has pioneered the art and science of visual computing. With a singular focus on this field, the company offers specialized platforms for the gaming, automotive, data center and professional visualization markets. Its products, services and software deliver amazing experiences in virtual reality, artificial intelligence and autonomous cars.
The stock has been clocking solid returns since the beginning of 2016 and has gained approximately 92% year to date. The robust performance is mainly because of the company’s phenomenal results in back-to-back quarters. This has boosted investor confidence in the stock substantially as many realized that the company is much larger than simply GPUs.
In the second quarter, the company posted earnings of 44 cents, much better than our estimate of 37 cents. This followed another massive beat by the company — 18.9% in the previous quarter — indicating that this stock is on fire.
NVIDIA’s foray into the autonomous vehicles and other automotive electronics space has been driving this stock higher since mid 2015. It should be noted that, during the last reported quarterly results, the company witnessed a 68% year over year jump in automotive segment revenues mainly driven by premium infotainment and digital cockpit features in mainstream cars.
Its plan to unveil new technology for self-driving cars is also encouraging. But the evolution of smart cars that can "see" for us, alert us to danger and even brake the car when we're not paying attention is just the beginning.
Notably, during the 2016 CES event, the company unveiled a computer chip called Drive PX 2 to power self driving cars. Drive PX 2 is considered to be as powerful as 150 MacBook Pros, and has the capacity to power 12 video camera inputs and sensor fusion. The chip, according to NVIDIA, can run about 24 trillion deep learning operations per second thereby enabling driverless cars to determine the next move in a fraction of a second.
While consumers are already using cameras to stay in a single lane, which has greatly reduced accidents, this is the not the main reason behind the development of this technology. It's in fact the statistics that show a dramatic rise in distracted driving and how some new auto technology like Automatic Emergency Braking (AEB) can prevent tens of thousands of rear-end collisions every year, saving countless lives. NVIDIA is also trying to revolutionize technology to make cars a safer means of getting around.
As long as the pace of development of automotive technology keeps up, we believe that this Zacks Rank #1 (Strong Buy) stock, with a long-term EPS growth estimate of 10.3%, will continue to rally.
Many would argue that NVIDIA with its hefty forward P/E valuation of 38.2x compared with the industry average of 17.5x is a risky bet. We beg to differ as hefty valuations and increasing share prices do not necessarily imply that the stock does not have much upside potential left.
Facebook Inc.
Facebook closed at $123.91 yesterday, trading near its last 52-week high of $128.33. Year to date, its shares have gained over 21%. The impressive performance on the trading front has largely been due to back-to-back outperformance in quarterly results. Stellar revenues from mobile ads and video efforts were primary growth catalysts.
Also, Facebook’s consistently and exponentially expanding user base continues to be one of its biggest strengths. Actually, this social networking site has an unparalleled user base of 1.71 billion monthly active users (MAUs). In addition, its mobile MAUs, Daily Active Users (DAUs) as well as Mobile DAUs exceed a staggering 1 billion. Besides great fundamentals, Facebook has equally strong prospects ahead.
Given that the company hit a jackpot with the monetization of Instagram, investors are now looking forward to how Facebook monetizes its other subsidiaries – Messenger, Oculus and WhatsApp. Recently, Messenger crossed the 1 billion user milestone. It is now the third 1 billion plus user platform owned by the company, close on the heels of Facebook and WhatsApp. Plus, Messenger’s bot platform reportedly boasts over 18K chatbots. Chatbots could serve as a powerful strategy to monetize the platform.
One of the biggest advantages enjoyed by Facebook is its leadership. The company’s CEO, Mark Zuckerberg has come a long way since his Harvard days. It’s his vision for the company that impresses us. At the F8 conference, Zuckerberg clearly highlighted his ambitions of expanding Facebook to something more than just a social network. He has outlined plans for the next decade, which lays solid emphasis on the AI and AR/VR technology. Both these technologies will likely emerge as the next big business opportunities.
We continue to believe that the Facebook juggernaut is unstoppable despite its fair share of challenges like a moderating ad revenue growth rate and increasing expenses. As a result, Facebook sports a Zacks Rank #1.
Therefore, despite the stock’s high forward P/E valuation of 39.5x compared with the industry average of 36.0x, we consider that it still has huge growth potential in the days to come.
Bottom Line
These two stocks have grabbed the spotlight with striking performances on the back of solid earnings results and strong growth projections. Keeping this in mind, we believe investing in either would yield strong returns for your portfolio in the short term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>