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4 Stocks to Watch From a Prospering Technology Solutions Industry
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Players operating within the Zacks Computer – Integrated Systems industry, including Micron Technology (MU - Free Report) , Advanced Micro Devices (AMD - Free Report) , International Business Machines (IBM - Free Report) and Seagate Technology (STX - Free Report) , are reaping the benefits of several favorable industry trends like advancements in data management capabilities, a rapid shift away from traditional siloed systems toward more integrated deployment techniques and heightened demand for modern application development approaches. However, the industry is still recovering from significant headwinds stemming from persistent supply chain bottlenecks, a challenging macroeconomic climate characterized by rising inflation and higher interest rates, soaring prices for key inputs and delays in customer acceptance of new products and services. These factors have resulted in significant order backlogs across the industry, casting a shadow on its prospects.
Industry Description
The Zacks Computer - Integrated Systems industry comprises companies that deliver advanced information technology solutions spanning computer systems, software platforms, data storage infrastructure and microelectronics. These industry players are ramping up investments in data modernization and analytics, cybersecurity and threat defense, remote work enablement, process automation, contactless service delivery models, enhanced customer and employee experience offerings and supply chain modernization initiatives, which are aimed at accelerating digital transformation services for enterprise customers. Some players provide technological solutions (products and services) to help organizations connect, interact and transact with customers. Others develop and market information recognition, data entry software, systems and technologies.
4 Computer - Integrated Systems Industry Trends in Focus
Integrated Solutions Driving Demand: The industry is experiencing a surge in demand for integrated solutions across enterprises of all scales, driven by increasing investments in cutting-edge software technologies, such as the Internet of Things (IoT), big data analytics, artificial intelligence (AI) and blockchain. This demand is further fueled by the significant opportunities presented by business analytics, cloud computing, mobile technologies, security solutions and social business platforms. Additionally, industry players are anticipated to benefit from the recovering global IT spending, as predicted by Gartner, enabling them to capitalize on the rising demand for comprehensive and seamless integrated solutions that can streamline operations and enhance productivity across various sectors.
Solid Adoption of Multi-Cloud Model: The industry is witnessing the robust adoption of the multi-cloud model as enterprises seek to achieve better scalability and optimize resource utilization. This trend is expanding the scope of industry participants, enabling them to leverage the benefits of cloud and hardware/software virtual technologies, which are anticipated to favor the industry's growth.
Moreover, as growth and investment opportunities in developed countries continue to slow down, emerging economies are poised to play a crucial role in driving the industry's future. The multi-cloud model's increasing popularity, coupled with the tailwinds from cloud and virtual technologies and the potential of emerging markets, presents a strong foundation for industry participants to capitalize on new opportunities and foster sustained growth.
Supply-Chain Bottlenecks and Backlogs: Industry participants are grappling with a multitude of challenges, including supply constraints, softening demand for servers and cognitive applications, as well as delays in customer acceptance. These factors have contributed to consistent backlog levels, particularly in the Compute, High-Performance Computing & Mass Storage Class and Storage segments. Furthermore, the industry's outlook is affected by the volatility in foreign exchange rates, primarily due to the prevailing macroeconomic scenario and headwinds in emerging markets.
Semiconductor Chip Shortage Mars Prospects: The industry is grappling with the ripple effects of the ongoing semiconductor chip shortage, which has posed significant challenges for participants. The time-consuming business model transition to cloud computing has compounded these difficulties, requiring companies to navigate complex operational shifts amid supply chain disruptions. Moreover, the prospects of industry players are further dampened by lower spending across datacenter systems, primarily due to component shortages, particularly in memory and CPUs, as well as a deceleration in hyperscale spending.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Computer – Integrated Systems industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #32, which places it in the top 13% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Beats Sector & S&P 500
The Zacks Computer – Integrated Systems industry has outperformed the broader Computer and Technology sector and the Zacks S&P 500 composite in the past year.
The industry has returned 92% over this period compared with the S&P 500 and the broader Computer and Technology sector’s respective growth of 19.7% and 27.5%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month P/S, which is a commonly used multiple for valuing computer-integrated systems stocks, we see that the industry is currently trading at 4.88X compared with the S&P 500’s 5.67X. It is also below the sector’s forward 12-month P/S of 7.46X.
Over the past five years, the industry has traded as high as 4.97X and as low as 1.94X, with the median being at 2.95X, as the chart below shows.
Forward 12-Month Price-to-Sales (P/S) Ratio
4 Computer-Integrated Systems Providers to Watch
Micron Technology sits at the heart of several transformative tech trends. Its exposure to AI, high-performance data centers, autonomous vehicles and industrial IoT uniquely positions the company for sustainable long-term growth. Record revenues and margin expansion in the first quarter of fiscal 2026 reflect robust execution amid tight industry supply conditions expected to persist beyond 2026. The company has secured agreements for its entire calendar 2026 HBM supply, positioning it strategically as AI infrastructure demand accelerates. With $20 billion capital investment planned for fiscal 2026, including groundbreaking on the historic New York megafab and a second Idaho facility, Micron Technology is expanding capacity to address surging data center memory requirements. The strategic exit from consumer products enables a sharper focus on high-growth data center segments. MU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its fiscal 2026 earnings has moved north by 68.2% to $31.36 per share in the past 60 days. MU shares have gained 185% in the past six-month period.
Price & Consensus: MU
Seagate Technology presents a compelling buy opportunity in 2026 as fundamental growth drivers strengthen. The recent launch of 32TB hard drives across its Exos, SkyHawk AI, and IronWolf Pro portfolios addresses surging AI-driven data storage demand, particularly in video analytics, where organizations anticipate doubling their data needs. With production committed through calendar 2026 and Mozaic HAMR technology qualified with five major cloud providers — targeting three more by mid-2026 — Seagate's proprietary platform positions it to capture expanding market share. The upcoming Mozaic 4+ platform ramp and Dell Technologies integration further reinforce strong growth momentum, making 2026 an opportune entry point for long-term investors.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s fiscal 2026 earnings has moved north by 2.2% to $11.26 per share in the past 60 days. STX shares have gained 112.3% in the past six-month period.
Price & Consensus: STX
IBM is expected to benefit from strategic initiatives announced in recent months. The pending $11 billion Confluent acquisition will create an end-to-end data streaming platform critical for enterprise AI deployment, expected to boost adjusted EBITDA within the first year. The January launch of IBM Sovereign Core addresses surging digital sovereignty demands, enabling organizations to deploy AI workloads under secure, compliant control. Strategic partnerships with Pearson for AI-powered education and Riyadh Air for the world's first AI-native airline demonstrate IBM's expanding AI ecosystem. Additionally, quantum computing advancements with the 120-qubit Nighthawk chip targeting commercial quantum advantage strengthen IBM's technological leadership position.
The Zacks Consensus Estimate for this Zacks Rank #3 (Hold) company’s 2026 earnings has moved north by 0.3% to $12.19 per share in the past 60 days. IBM shares have returned 9.6% in the past six-month period.
Price & Consensus: IBM
AMD emerges as a compelling investment watch for 2026 as multiple catalysts converge. The OpenAI partnership begins deploying MI450 GPUs in H2 2026, marking AMD's strategic entry into large-scale AI infrastructure buildouts. The expanded HPE collaboration brings Helios rack-scale architecture to market globally, offering open standards-based solutions for enterprise AI workloads. On the client side, strong OEM adoption momentum accelerates with Ryzen AI 400 Series processors launching across major manufacturers in first-qiuarter 2026. AMD's ROCm software platform doubled compatibility in 2025, expanding developer accessibility. These fundamental business wins position AMD to capture meaningful share across data center and PC AI markets.
The Zacks Consensus Estimate for this Zacks Rank #3 company’s 2026 earnings has moved north by 0.1% to $6.26 per share in the past 60 days. AMD shares have gained 39.7% in the past six-month period.
Price & Consensus: AMD
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4 Stocks to Watch From a Prospering Technology Solutions Industry
Players operating within the Zacks Computer – Integrated Systems industry, including Micron Technology (MU - Free Report) , Advanced Micro Devices (AMD - Free Report) , International Business Machines (IBM - Free Report) and Seagate Technology (STX - Free Report) , are reaping the benefits of several favorable industry trends like advancements in data management capabilities, a rapid shift away from traditional siloed systems toward more integrated deployment techniques and heightened demand for modern application development approaches. However, the industry is still recovering from significant headwinds stemming from persistent supply chain bottlenecks, a challenging macroeconomic climate characterized by rising inflation and higher interest rates, soaring prices for key inputs and delays in customer acceptance of new products and services. These factors have resulted in significant order backlogs across the industry, casting a shadow on its prospects.
Industry Description
The Zacks Computer - Integrated Systems industry comprises companies that deliver advanced information technology solutions spanning computer systems, software platforms, data storage infrastructure and microelectronics. These industry players are ramping up investments in data modernization and analytics, cybersecurity and threat defense, remote work enablement, process automation, contactless service delivery models, enhanced customer and employee experience offerings and supply chain modernization initiatives, which are aimed at accelerating digital transformation services for enterprise customers. Some players provide technological solutions (products and services) to help organizations connect, interact and transact with customers. Others develop and market information recognition, data entry software, systems and technologies.
4 Computer - Integrated Systems Industry Trends in Focus
Integrated Solutions Driving Demand: The industry is experiencing a surge in demand for integrated solutions across enterprises of all scales, driven by increasing investments in cutting-edge software technologies, such as the Internet of Things (IoT), big data analytics, artificial intelligence (AI) and blockchain. This demand is further fueled by the significant opportunities presented by business analytics, cloud computing, mobile technologies, security solutions and social business platforms. Additionally, industry players are anticipated to benefit from the recovering global IT spending, as predicted by Gartner, enabling them to capitalize on the rising demand for comprehensive and seamless integrated solutions that can streamline operations and enhance productivity across various sectors.
Solid Adoption of Multi-Cloud Model: The industry is witnessing the robust adoption of the multi-cloud model as enterprises seek to achieve better scalability and optimize resource utilization. This trend is expanding the scope of industry participants, enabling them to leverage the benefits of cloud and hardware/software virtual technologies, which are anticipated to favor the industry's growth.
Moreover, as growth and investment opportunities in developed countries continue to slow down, emerging economies are poised to play a crucial role in driving the industry's future. The multi-cloud model's increasing popularity, coupled with the tailwinds from cloud and virtual technologies and the potential of emerging markets, presents a strong foundation for industry participants to capitalize on new opportunities and foster sustained growth.
Supply-Chain Bottlenecks and Backlogs: Industry participants are grappling with a multitude of challenges, including supply constraints, softening demand for servers and cognitive applications, as well as delays in customer acceptance. These factors have contributed to consistent backlog levels, particularly in the Compute, High-Performance Computing & Mass Storage Class and Storage segments. Furthermore, the industry's outlook is affected by the volatility in foreign exchange rates, primarily due to the prevailing macroeconomic scenario and headwinds in emerging markets.
Semiconductor Chip Shortage Mars Prospects: The industry is grappling with the ripple effects of the ongoing semiconductor chip shortage, which has posed significant challenges for participants. The time-consuming business model transition to cloud computing has compounded these difficulties, requiring companies to navigate complex operational shifts amid supply chain disruptions. Moreover, the prospects of industry players are further dampened by lower spending across datacenter systems, primarily due to component shortages, particularly in memory and CPUs, as well as a deceleration in hyperscale spending.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Computer – Integrated Systems industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #32, which places it in the top 13% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Beats Sector & S&P 500
The Zacks Computer – Integrated Systems industry has outperformed the broader Computer and Technology sector and the Zacks S&P 500 composite in the past year.
The industry has returned 92% over this period compared with the S&P 500 and the broader Computer and Technology sector’s respective growth of 19.7% and 27.5%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month P/S, which is a commonly used multiple for valuing computer-integrated systems stocks, we see that the industry is currently trading at 4.88X compared with the S&P 500’s 5.67X. It is also below the sector’s forward 12-month P/S of 7.46X.
Over the past five years, the industry has traded as high as 4.97X and as low as 1.94X, with the median being at 2.95X, as the chart below shows.
Forward 12-Month Price-to-Sales (P/S) Ratio
4 Computer-Integrated Systems Providers to Watch
Micron Technology sits at the heart of several transformative tech trends. Its exposure to AI, high-performance data centers, autonomous vehicles and industrial IoT uniquely positions the company for sustainable long-term growth. Record revenues and margin expansion in the first quarter of fiscal 2026 reflect robust execution amid tight industry supply conditions expected to persist beyond 2026. The company has secured agreements for its entire calendar 2026 HBM supply, positioning it strategically as AI infrastructure demand accelerates. With $20 billion capital investment planned for fiscal 2026, including groundbreaking on the historic New York megafab and a second Idaho facility, Micron Technology is expanding capacity to address surging data center memory requirements. The strategic exit from consumer products enables a sharper focus on high-growth data center segments. MU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its fiscal 2026 earnings has moved north by 68.2% to $31.36 per share in the past 60 days. MU shares have gained 185% in the past six-month period.
Price & Consensus: MU
Seagate Technology presents a compelling buy opportunity in 2026 as fundamental growth drivers strengthen. The recent launch of 32TB hard drives across its Exos, SkyHawk AI, and IronWolf Pro portfolios addresses surging AI-driven data storage demand, particularly in video analytics, where organizations anticipate doubling their data needs. With production committed through calendar 2026 and Mozaic HAMR technology qualified with five major cloud providers — targeting three more by mid-2026 — Seagate's proprietary platform positions it to capture expanding market share. The upcoming Mozaic 4+ platform ramp and Dell Technologies integration further reinforce strong growth momentum, making 2026 an opportune entry point for long-term investors.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s fiscal 2026 earnings has moved north by 2.2% to $11.26 per share in the past 60 days. STX shares have gained 112.3% in the past six-month period.
Price & Consensus: STX
IBM is expected to benefit from strategic initiatives announced in recent months. The pending $11 billion Confluent acquisition will create an end-to-end data streaming platform critical for enterprise AI deployment, expected to boost adjusted EBITDA within the first year. The January launch of IBM Sovereign Core addresses surging digital sovereignty demands, enabling organizations to deploy AI workloads under secure, compliant control. Strategic partnerships with Pearson for AI-powered education and Riyadh Air for the world's first AI-native airline demonstrate IBM's expanding AI ecosystem. Additionally, quantum computing advancements with the 120-qubit Nighthawk chip targeting commercial quantum advantage strengthen IBM's technological leadership position.
The Zacks Consensus Estimate for this Zacks Rank #3 (Hold) company’s 2026 earnings has moved north by 0.3% to $12.19 per share in the past 60 days. IBM shares have returned 9.6% in the past six-month period.
Price & Consensus: IBM
AMD emerges as a compelling investment watch for 2026 as multiple catalysts converge. The OpenAI partnership begins deploying MI450 GPUs in H2 2026, marking AMD's strategic entry into large-scale AI infrastructure buildouts. The expanded HPE collaboration brings Helios rack-scale architecture to market globally, offering open standards-based solutions for enterprise AI workloads. On the client side, strong OEM adoption momentum accelerates with Ryzen AI 400 Series processors launching across major manufacturers in first-qiuarter 2026. AMD's ROCm software platform doubled compatibility in 2025, expanding developer accessibility. These fundamental business wins position AMD to capture meaningful share across data center and PC AI markets.
The Zacks Consensus Estimate for this Zacks Rank #3 company’s 2026 earnings has moved north by 0.1% to $6.26 per share in the past 60 days. AMD shares have gained 39.7% in the past six-month period.
Price & Consensus: AMD