After a rough showing last year, technology stocks have busted out of the gate strong in 2023, undoubtedly a welcomed development among investors.
A hawkish Fed, geopolitical uncertainties, and inflation all contributed to the sector’s poor performance, with investors facing volatility throughout the year.
However, with sentiment shifting following better-than-expected economic data, buyers have finally returned after a long hibernation.
Three technology stocks – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have stopped for nobody so far in 2023, all up more than 15% year-to-date.
In addition, all three have seen their earnings outlooks drift higher as of late, providing the fuel shares need to continue their runs. Let’s take a closer look at each one.
Jabil Inc.
Jabil provides electronic manufacturing services and solutions to its customers, currently boasting a Zacks Rank #2 (Buy).
The company’s latest quarterly release on December 15th has helped lift shares; JBL exceeded the Zacks Consensus EPS Estimate by nearly 5% and reported revenue 4% above expectations thanks to the strong execution of its operational plans.
In fact, it was the company’s fifth consecutive quarter of exceeding both earnings and revenue estimates.
Further, JBL shares provide exposure to technology paired with an income stream; JBL pays a modest dividend, currently yielding 0.4% with a sustainable payout ratio sitting at 5% of its earnings.
Salesforce
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, enabling organizations to better manage critical operations.
Activists have been circling CRM recently, pushing for the company to improve its margins which has provided a big boost for shares.
Analysts have upped their outlook across all timeframes as of late, landing Salesforce into a Zacks Rank #2 (Buy).
Following the challenging price action in 2022, CRM’s valuation multiples have taken a step back; the company’s forward price-to-sales ratio sits at 4.9X, well beneath the 7.8X five-year median and steep highs of 9.5X in 2022.
NetEase
NetEase is a Chinese internet technology company engaged in the development of applications, services, and other technologies. Presently, NTES is a Zacks Rank #2 (Buy).
Similar to JBL, NetEase rewards its shareholders via its annual dividend that currently yields 1.9%, nicely above the Zacks Computer and Technology sector average.
Notably, NetEase’s payout has grown by more than 30% over the last five years.
NetEase reported strong results in its latest quarter, exceeding the Zacks Consensus EPS Estimate by a sizable 42% and reporting revenue modestly ahead of expectations.
Impressively, the average EPS beat across its last four releases is 34%. As we can see in the chart below, investors certainly cheered on the latest quarterly release.
Bottom Line
With sentiment slowly shifting following some better-than-expected economic data, buyers are finally revisiting technology stocks.
Of course, nobody has a magic crystal ball that tells us where the sector heads next, but we’re certainly off to a far better start compared to 2022.
All three stocks above from the Zacks Computer and Technology Sector – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have been no exception to the sector’s great start, all up more than 15% year-to-date.
In addition, all three have seen their earnings outlooks drift higher as of late, providing the cherry on top.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
After a rough showing last year, technology stocks have busted out of the gate strong in 2023, undoubtedly a welcomed development among investors.
A hawkish Fed, geopolitical uncertainties, and inflation all contributed to the sector’s poor performance, with investors facing volatility throughout the year.
However, with sentiment shifting following better-than-expected economic data, buyers have finally returned after a long hibernation.
Three technology stocks – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have stopped for nobody so far in 2023, all up more than 15% year-to-date.
In addition, all three have seen their earnings outlooks drift higher as of late, providing the fuel shares need to continue their runs. Let’s take a closer look at each one.
Jabil Inc.
Jabil provides electronic manufacturing services and solutions to its customers, currently boasting a Zacks Rank #2 (Buy).
The company’s latest quarterly release on December 15th has helped lift shares; JBL exceeded the Zacks Consensus EPS Estimate by nearly 5% and reported revenue 4% above expectations thanks to the strong execution of its operational plans.
In fact, it was the company’s fifth consecutive quarter of exceeding both earnings and revenue estimates.
Further, JBL shares provide exposure to technology paired with an income stream; JBL pays a modest dividend, currently yielding 0.4% with a sustainable payout ratio sitting at 5% of its earnings.
Salesforce
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, enabling organizations to better manage critical operations.
Activists have been circling CRM recently, pushing for the company to improve its margins which has provided a big boost for shares.
Analysts have upped their outlook across all timeframes as of late, landing Salesforce into a Zacks Rank #2 (Buy).
Following the challenging price action in 2022, CRM’s valuation multiples have taken a step back; the company’s forward price-to-sales ratio sits at 4.9X, well beneath the 7.8X five-year median and steep highs of 9.5X in 2022.
NetEase
NetEase is a Chinese internet technology company engaged in the development of applications, services, and other technologies. Presently, NTES is a Zacks Rank #2 (Buy).
Similar to JBL, NetEase rewards its shareholders via its annual dividend that currently yields 1.9%, nicely above the Zacks Computer and Technology sector average.
Notably, NetEase’s payout has grown by more than 30% over the last five years.
NetEase reported strong results in its latest quarter, exceeding the Zacks Consensus EPS Estimate by a sizable 42% and reporting revenue modestly ahead of expectations.
Impressively, the average EPS beat across its last four releases is 34%. As we can see in the chart below, investors certainly cheered on the latest quarterly release.
Bottom Line
With sentiment slowly shifting following some better-than-expected economic data, buyers are finally revisiting technology stocks.
Of course, nobody has a magic crystal ball that tells us where the sector heads next, but we’re certainly off to a far better start compared to 2022.
All three stocks above from the Zacks Computer and Technology Sector – Jabil Inc. (JBL - Free Report) , Salesforce (CRM - Free Report) , and NetEase (NTES - Free Report) – have been no exception to the sector’s great start, all up more than 15% year-to-date.
In addition, all three have seen their earnings outlooks drift higher as of late, providing the cherry on top.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
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