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Buy These Tech Stocks for The Momentum Wave

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Tech stocks are off to a resilient start as we wrap up the first quarter of 2023. Impressively, the technology sector held up throughout the month as other areas of the market declined amid financial concerns stemming from the collapse of Silicon Valley Bank and Credit Suisse ).

With the Nasdaq up 16% this year let’s take a look at some top-rated tech stocks that have an “A” Zacks Style Scores grade for Momentum at the moment.

Arista Networks (ANET - Free Report) )

Sporting a Zacks Rank #1 (Strong Buy), Arista Networks (ANET - Free Report) is a cloud networking solutions provider for data centers and cloud computing environments.  

YTD Performance: Trading at $166 per share, Arista stock is up +37% year to date to easily top the Nasdaq’s +16% and the S&P 500’s +6. The earnings estimate revisions have been the catalyst here which attributes to Arista’s high Zacks Rank.

Fiscal 2023 EPS estimates are still up 11% during the quarter with FY24 earnings estimates soaring 15%. Arista’s earnings are now projected to climb 26% this year and jump another 11% in FY24 at $6.44.

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DocuSign (DOCU - Free Report) )

Next up is DocuSign (DOCU - Free Report) which sports a Zacks Rank #2 (Buy). The usage of DocuSign’s Agreement Cloud is more common as the software suite automates and connects the entire agreement process.  

YTD Performance:  At $58 a share, DocuSign stock is up +5% this year to trail the broader indexes. However, earnings estimates have recenlty trended higher making DOCU look attractive with shares still 49% from their 52-week highs.

Supporting more upside in DocuSign stock, its current fiscal 2024 earnings estimates have gone up 9% over the last 30 days with FY25 EPS estimates up 5%. DocuSign’s earnings are now expected to jump 15% in FY24 and rise another 10% in FY25 at $2.57 per share.

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Infineon Technologies (IFNNY - Free Report) )

Among chipmakers, Infineon Technologies (IFNNY - Free Report) could have more upside with a Zacks Rank #2 (Buy). Infineon is an application-oriented semiconductor solutions provider for use in speech and data communications, peripherals, wireless communications, automotive and industrial electronics, security and chip cards along with memory products.

YTD Performance:  Infineon stock trades at $40 per share and has soared 36% YTD to outperform the S&P 500 and Nasdaq. With earnings estimates on the rise, Infineon’s P/E valuation also stands out and supports more upside.

Infineon stock trades at 16.7X forward earnings which is nicely below the industry average of 19.6X and the S&P 500’s 18.6X. Even better, Infineon trades 66% below its decade high of 49.5X and at a 21% discount to the median of 21.2X.

Zacks Investment Research
Image Source: Zacks Investment Research


Rrising earnings estimates are a great sign that these tech stocks will be top performers this year, especialy if the rally in the broader technology sector continues. Furthermore, their unique businesses can reach a wide range of clients making them viable investments for 2023 and beyond.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Infineon Technologies AG (IFNNY) - free report >>

Arista Networks, Inc. (ANET) - free report >>

DocuSign (DOCU) - free report >>

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