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The sudden return of volatility to global stock markets has created buying opportunities in large-cap tech stocks as the sector’s investors look to rebound from recent selloffs. The world’s tech leaders have dominated Wall Street over the past two years, and now, investors might have a fresh chance to buy a few previously red-hot stocks at a discount.
Of course, this recent volatility has made some investors hesitant, with bearish traders quick to draw similarities between this latest tech rally and the infamous dot-com bubble of the late 90s and early 2000s.
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 21.0, 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:
Thanks to its strategic investments in datacenters and artificial intelligence, Nvidia has emerged as one of Wall Street’s most popular stocks. Of course, the company’s industry-leading GPUs remain its backbone and are the number one choice for PC gamers worldwide. Nvidia shares have gained over 130% within the past year, 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 see earnings and revenue growth of more than 28% in the current fiscal year. What’s more, management is strengthening its financial stability with cash flow growth of 68% right now. With shares at 38.6x forward earnings, the stock is hardly cheap, but that is actually close to the lowest valuation we have seen for NVDA in nearly a year—another sign that now is a solid time to buy.
2. Sony Corporation
This Japanese electronics giant has a dominant position with many key products, including audio and video equipment, televisions, displays, semiconductors, electronic components, computers and computer peripherals, and telecommunication equipment. Sony is currently sporting a Zacks Rank #1 (Strong Buy) and looks like a promising tech stock for both the near term and in the coming years.
Sony shares have soared nearly 52% over the past year, but the stock is still trading below 13x earnings and 0.9x sales. Meanwhile, management is generating $2.93 in cash per share, which should strengthen the company’s ability to invest in new technologies. Thanks to softer year-over-year comparisons, earnings growth is expected to fall in the triple digits this fiscal year, but expansion is expected to continue on the top line going forward.
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 #1 (Strong Buy).
Intel is a popular value play in this space, with its Forward P/E of 14.8 and PEG of 1.8 falling well within the ranges typically considered optimal for returns. The company is also a cash cow, generating $5.32 in cash per share on the back of 18% cash flow growth. And Intel is also an income option, with the company currently offering a dividend yield of about 2.3%.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
3 Blue Chip Tech Stocks to Buy Now
The sudden return of volatility to global stock markets has created buying opportunities in large-cap tech stocks as the sector’s investors look to rebound from recent selloffs. The world’s tech leaders have dominated Wall Street over the past two years, and now, investors might have a fresh chance to buy a few previously red-hot stocks at a discount.
Of course, this recent volatility has made some investors hesitant, with bearish traders quick to draw similarities between this latest tech rally and the infamous dot-com bubble of the late 90s and early 2000s.
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 21.0, 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. 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. Of course, the company’s industry-leading GPUs remain its backbone and are the number one choice for PC gamers worldwide. Nvidia shares have gained over 130% within the past year, 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 see earnings and revenue growth of more than 28% in the current fiscal year. What’s more, management is strengthening its financial stability with cash flow growth of 68% right now. With shares at 38.6x forward earnings, the stock is hardly cheap, but that is actually close to the lowest valuation we have seen for NVDA in nearly a year—another sign that now is a solid time to buy.
2. Sony Corporation
This Japanese electronics giant has a dominant position with many key products, including audio and video equipment, televisions, displays, semiconductors, electronic components, computers and computer peripherals, and telecommunication equipment. Sony is currently sporting a Zacks Rank #1 (Strong Buy) and looks like a promising tech stock for both the near term and in the coming years.
Sony shares have soared nearly 52% over the past year, but the stock is still trading below 13x earnings and 0.9x sales. Meanwhile, management is generating $2.93 in cash per share, which should strengthen the company’s ability to invest in new technologies. Thanks to softer year-over-year comparisons, earnings growth is expected to fall in the triple digits this fiscal year, but expansion is expected to continue on the top line going forward.
3. 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 #1 (Strong Buy).
Intel is a popular value play in this space, with its Forward P/E of 14.8 and PEG of 1.8 falling well within the ranges typically considered optimal for returns. The company is also a cash cow, generating $5.32 in cash per share on the back of 18% cash flow growth. And Intel is also an income option, with the company currently offering a dividend yield of about 2.3%.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>