We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The technology sector has been on fire throughout 2017, and despite the recent tech sell-off, the fundamental picture for this sector should continue to be strong in 2018. While many will feel that they have already missed their chance to win big on tech stocks, there are still plenty of opportunities to cash in ahead of the New Year.
Of course, this is not the first notable tech rally. The cloud of the dot-com bubble still lingers over this sector, and plenty on Wall Street remain hesitant to load up on tech stocks because of it.
However, unlike the dot-com bubble, there is real earnings and revenue growth fueling this tech rally. In fact, the average P/E ratio of our “Computer and Technology” sector currently sits at 24.57, which compares favorably to the dot-com era’s average that routinely soared into the 200s.
Another interesting trend in today’s tech rally is that, rather than obsessing over the next big thing, investors seem to rewarding tried-and-true brands for their respectable growth. This means that some of the strongest tech stocks are the household names that consumers already know and love.
With that said, check out these three blue chip tech stocks to buy now:
As the world’s largest semiconductor manufacturer, Intel has its hands in nearly every corner of the modern tech world. And as cloud computing and the Internet of Things continue to grow, Intel should continue to benefit. Right now, the chip-making behemoth is a Zacks Rank #2 (Buy).
Intel crushed earnings estimates by over 26% in its recent quarter, leading to a tidal wave of positive estimate revisions. Our consensus estimate for its upcoming fiscal year has gained 12 cents in just 60 days, and now we expect the company to continue its EPS expansion. Still, with a P/E ratio of just 14.37, Intel shares look undervalued, and income investors will not mind the stock’s 2.33% dividend.
Thanks to its strategic investments in datacenters and artificial intelligence, Nvidia has emerged as one of Wall Street’s most popular stocks this year. Of course, the company’s industry-leading GPUs remains its backbone and are the number one choice for PC gamers worldwide. Nvidia shares have gained over 82% year-to-date, and now that the stock sports a Zacks Rank #1 (Strong Buy), it is showing few signs of stopping.
Our current consensus estimates are calling for Nvidia to end the current fiscal year with earnings growth of 60%, and that expansion is expected to continue with EPS growth of an additional 11% next year. Nvidia is also expected to grow its revenues by another 16% in the upcoming year. What’s more, management is strengthening its financial stability with cash flow growth of 124% right now.
Microsoft has served as the most recognizable name in the consumer software industry for years, and with the recent expansion of its Azure platform, the company has cemented itself as a leader in cloud computing. Shares of Microsoft have moved more than 37% higher in 2017, and the stock is currently a Zacks Rank #2 (Buy).
Microsoft is expanding its cash flow at a rate of 17% right now. The company’s RoE of 35% and net margin of 25% are well ahead of their respective industry averages. The software giant is expected to grow its earnings at an annualized rate of 13% over the next three to five years, and with its PEG of 1.99, investors are getting a decent price for that growth. The firm also offers a 1.96% dividend.
Bottom Line
While there are no guarantees in the stock market, several bullish indicators point to continued strength in the tech sector. With corporate tax reform on the horizon and earnings growth already present, these blue chip tech companies should be able to continue their dominance.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
3 Blue Chip Tech Stocks to Buy Now
The technology sector has been on fire throughout 2017, and despite the recent tech sell-off, the fundamental picture for this sector should continue to be strong in 2018. While many will feel that they have already missed their chance to win big on tech stocks, there are still plenty of opportunities to cash in ahead of the New Year.
Of course, this is not the first notable tech rally. The cloud of the dot-com bubble still lingers over this sector, and plenty on Wall Street remain hesitant to load up on tech stocks because of it.
However, unlike the dot-com bubble, there is real earnings and revenue growth fueling this tech rally. In fact, the average P/E ratio of our “Computer and Technology” sector currently sits at 24.57, which compares favorably to the dot-com era’s average that routinely soared into the 200s.
Another interesting trend in today’s tech rally is that, rather than obsessing over the next big thing, investors seem to rewarding tried-and-true brands for their respectable growth. This means that some of the strongest tech stocks are the household names that consumers already know and love.
With that said, check out these three blue chip tech stocks to buy now:
1. Intel Corporation (INTC - Free Report)
As the world’s largest semiconductor manufacturer, Intel has its hands in nearly every corner of the modern tech world. And as cloud computing and the Internet of Things continue to grow, Intel should continue to benefit. Right now, the chip-making behemoth is a Zacks Rank #2 (Buy).
Intel crushed earnings estimates by over 26% in its recent quarter, leading to a tidal wave of positive estimate revisions. Our consensus estimate for its upcoming fiscal year has gained 12 cents in just 60 days, and now we expect the company to continue its EPS expansion. Still, with a P/E ratio of just 14.37, Intel shares look undervalued, and income investors will not mind the stock’s 2.33% dividend.
2. Nvidia Corporation (NVDA - Free Report)
Thanks to its strategic investments in datacenters and artificial intelligence, Nvidia has emerged as one of Wall Street’s most popular stocks this year. Of course, the company’s industry-leading GPUs remains its backbone and are the number one choice for PC gamers worldwide. Nvidia shares have gained over 82% year-to-date, and now that the stock sports a Zacks Rank #1 (Strong Buy), it is showing few signs of stopping.
Our current consensus estimates are calling for Nvidia to end the current fiscal year with earnings growth of 60%, and that expansion is expected to continue with EPS growth of an additional 11% next year. Nvidia is also expected to grow its revenues by another 16% in the upcoming year. What’s more, management is strengthening its financial stability with cash flow growth of 124% right now.
3. Microsoft Corporation (MSFT - Free Report)
Microsoft has served as the most recognizable name in the consumer software industry for years, and with the recent expansion of its Azure platform, the company has cemented itself as a leader in cloud computing. Shares of Microsoft have moved more than 37% higher in 2017, and the stock is currently a Zacks Rank #2 (Buy).
Microsoft is expanding its cash flow at a rate of 17% right now. The company’s RoE of 35% and net margin of 25% are well ahead of their respective industry averages. The software giant is expected to grow its earnings at an annualized rate of 13% over the next three to five years, and with its PEG of 1.99, investors are getting a decent price for that growth. The firm also offers a 1.96% dividend.
Bottom Line
While there are no guarantees in the stock market, several bullish indicators point to continued strength in the tech sector. With corporate tax reform on the horizon and earnings growth already present, these blue chip tech companies should be able to continue their dominance.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>