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5 Top-Performing S&P 500 Tech Stocks of Q1

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The technology sector has come a long way from the chaotic 2018, having recovered impressively so far this year. The Technology Select Sector SPDR’s (XLK - Free Report) 17.7% year-to-date return, outperforming the S&P 500’s rally of 12.5%, bears testimony to the fact.

Rapid adoption of AI, cloud, IoT, autonomous cars and wearables has been fueling growth for the sector. Moreover, increasing video streaming, growing demand for smart speakers and connected devices, powered by AI, machine learning and deep learning, are key catalysts.

Additionally, the accelerated deployment of 5G technology and faster-than-expected growth in robotics set the stage for more development.



 

This Too Shall Pass

Although 2019 looks promising for the sector, the volatile macroeconomic scenario is quite an eyesore. Notably, the semiconductor industry, which forms the fulcrum of the tech sector, is caught in a volatile geopolitical situation stemming from trade and tariff disputes as well as economic weakness in China.

Moreover, a soft second half of 2018, primarily due to a slowdown in the memory market, fueled the uncertainty.

Nonetheless, positive commentary by CEOs of leading tech companies on growth revival in the second half of 2019 is boosting investors’ confidence.

Further, a trade truce between the United States and China, financial stimulus by Chinese authorities and a dovish stance by a growing number of central banks are strengthening the stock market.

Here we pick a few tech stocks from the S&P 500 which flaunt a Zacks Rank #1 (Strong Buy) and have outperformed the composite in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Picks

Santa Clara, CA-based Arista Networks, Inc. (ANET - Free Report) is engaged in providing cloud networking solutions to data centers and cloud computing environments. The Zacks Consensus Estimate for the company’s 2019 earnings has been revised 3.7% upward to $9.26 over the past 60 days. The stock has gained 47.7% year to date, significantly outperforming the industry’s 23.7% rally.

Year-to-Date Price Performance

 


Olathe, KS-based, Garmin, Ltd. (GRMN - Free Report) is an original equipment manufacturer of navigation and communication equipment that incorporate the global positioning system-based technology. The Zacks Consensus Estimate for the company’s 2019 earnings has risen 6.9% to $3.72 over the past 60 days. Shares of Garmin have gained 35.6% year to date, significantly outperforming the industry’s 20.3% rise.

Year-to-Date Price Performance

 


 

Based in San Jose, CA, Cadence Design Systems Inc. (CDNS - Free Report) offers products and tools that help customers design electronic products. The Zacks Consensus Estimate for its current-year earnings of $2.04 has risen 4.6% in the past 60 days.

Headquartered in Mountain View, CA, Synopsys Inc. (SNPS - Free Report) is also a vendor of electronic design automation software to semiconductor and electronics industries. The Zacks Consensus Estimate for its current-year earnings has increased 2 cents to $4.27 in the past 60 days.

Mountain View, CA-headquartered Symantec Corporation is a provider of a broad range of solutions for content security and information back up to individuals and enterprises. The Zacks Consensus Estimate for its fiscal 2019 earnings of $1.59 has moved 3.3% north in the past 60 days.

In the year-to-date period, shares of Cadence, Synopsys and Symantec have returned 44.2%, 33.5% and 20.9%, respectively, outperforming the 17.9% rally of the industry  that the three belong to.

Year-to-Date Price Performance

 



Zacks' Top 10 Stocks for 2019


In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

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