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Technology stocks are expected to see a robust second-quarter 2020 earnings season driven by solid demand for remote working and learning technology, rising need for cloud computing services and increasing deployment of 5G amid the coronavirus pandemic.
The work from home and online-learning trend is expected to have benefited Zoom Video, Microsoft, Google and Cisco. Increased usage of cloud computing has been quite a boon for Amazon Web Services, Google Cloud and Microsoft Azure in the to-be-reported quarter.
Meanwhile, demand for data center chips remains elevated. Intel’s Data Center Group revenues soared 43% year over year driven by strong mix of high-performance second-gen Xeon Scalable processors and solid demand from Cloud service providers. (Read More: Intel Beats on Q2 Earnings, Stock Hit By 7nm Delay) Advanced Micro Devices is also expected to benefit from the trend.
Moreover, Skyworks third-quarter fiscal 2020 results reflected accelerating demand for 5G handsets. The company stated that global 5G subscriptions are continuing to grow with estimates set at $3 billion for the next five years. (Read More: Skyworks’ Q3 Earnings and Revenues Beat Estimates).
Upcoming Tech Stock Earnings Releases
Investors interested in the technology sector are eagerly awaiting earnings releases from players like Facebook , PayPal (PYPL - Free Report) , Tyler Technologies (TYL - Free Report) , Shopify (SHOP - Free Report) , ServiceNow (NOW - Free Report) and Cognizant Technology (CTSH - Free Report) on Jul 29.
Facebook’s second-quarter advertising revenues are expected to have been negatively impacted by the pandemic. The company expects ad sales to be hurt by weakness in the travel and automotive industries.
Moreover, this social-network giant has a Zacks Rank #3 (Hold) and an Earnings ESP of +5.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Notably, per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Meanwhile, Paypal’s second-quarter 2020 results are expected to reflect strength in product lines, including Venmo and One Touch.
Total Payment Volume (TPV) is likely to have benefited from Venmo’s growing monetization efforts. Further, One Touch’s growing momentum among merchants on the heels of its robust mobile checkout services might have driven growth in PayPal’s mobile TPV in the second quarter. (Read More: Portfolio Strength to Benefit PayPal’s Q2 Earnings)
Moreover, PayPal has a favorable combination of a Zacks Rank #3 and an Earnings ESP of +2.15%.
Tyler Technologies has a Zacks Rank of 3 and an Earnings ESP of +4.13%, which increases the chances of a beat.
However, the company’s second-quarter performance is likely to have been negatively impacted by economic and business disruptions due to the coronavirus crisis. Delays in procurement processes and lengthening sales cycles, as public sector entities are now more focused on pandemic-related issues, might reflect on revenue results for the quarter under review. (Read More: Tyler Technologies to Report Q2 Earnings: What to Expect?)
Meanwhile, momentum in online sales triggered by the coronavirus pandemic is expected to have driven Shopify’s second-quarter performance
The company is also anticipated to have gained from introduction of contactless payment hardware for Canadian retailers using new point of sale (POS) system, Shopify POS. This includes the Shopify Tap & Chip Card Reader, Shopify Tap & Chip Case and Shopify Retail Kit. (Read More: Will Expanding Merchant Base Aid Shopify's Q2 Earnings?)
However, Shopify has a Zacks Rank #2 but an Earnings ESP of 0.00% which dims possibilities of a beat.
ServiceNow’s second-quarter performance is expected to have benefited from the solid traction of the company’s IT service management and IT operations management solutions stemming from rapid digital transformation taking place across all industries due to the coronavirus-led remote work wave.
However, coronavirus-induced uncertainties are likely to have limited growth. Also, higher expenditure on product innovation and acquisitions are anticipitated to have exerted pressure on margins during the quarter under review.
Cognizant has a Zacks Rank #4 (Sell) and an Earnings ESP of +3.11%.
Markedly, Cognizant's business was largely disrupted in early April due to delays in project fulfillment as project delivery shifted to work from home in the first quarter. Additionally, in the wake of the ransomware attack, some clients opted to suspend Cognizant’s access to their networks, which resulted in decline in billings for the period.
Moreover, reduced client demand, primarily in the travel and hospitality industries hit by the coronavirus-led lockdown, is expected to have thwarted top-line growth in the soon-to-be-reported quarter. (Read More: Cognizant to Report Q2 Earnings: What's in Store?)
Cognizant Technology Solutions Corporation Price and EPS Surprise
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Tech Stocks' Jul 29 Earnings Roster: FB, PYPL, TYL & More
Technology stocks are expected to see a robust second-quarter 2020 earnings season driven by solid demand for remote working and learning technology, rising need for cloud computing services and increasing deployment of 5G amid the coronavirus pandemic.
The work from home and online-learning trend is expected to have benefited Zoom Video, Microsoft, Google and Cisco. Increased usage of cloud computing has been quite a boon for Amazon Web Services, Google Cloud and Microsoft Azure in the to-be-reported quarter.
Markedly, Microsoft Azure revenues surged 50% at constant currency, reflecting steady demand in the recently-reported fiscal fourth quarter. (Read More: Microsoft Q4 Earnings & Revenues Top Estimates, Up Y/Y)
Meanwhile, demand for data center chips remains elevated. Intel’s Data Center Group revenues soared 43% year over year driven by strong mix of high-performance second-gen Xeon Scalable processors and solid demand from Cloud service providers. (Read More: Intel Beats on Q2 Earnings, Stock Hit By 7nm Delay) Advanced Micro Devices is also expected to benefit from the trend.
Moreover, Skyworks third-quarter fiscal 2020 results reflected accelerating demand for 5G handsets. The company stated that global 5G subscriptions are continuing to grow with estimates set at $3 billion for the next five years. (Read More: Skyworks’ Q3 Earnings and Revenues Beat Estimates).
Upcoming Tech Stock Earnings Releases
Investors interested in the technology sector are eagerly awaiting earnings releases from players like Facebook , PayPal (PYPL - Free Report) , Tyler Technologies (TYL - Free Report) , Shopify (SHOP - Free Report) , ServiceNow (NOW - Free Report) and Cognizant Technology (CTSH - Free Report) on Jul 29.
Facebook’s second-quarter advertising revenues are expected to have been negatively impacted by the pandemic. The company expects ad sales to be hurt by weakness in the travel and automotive industries.
Nevertheless, e-commerce push, focus on AR and expanding user base in Asia Pacific are expected to have aided the quarterly performance. (Read More: Facebook to Report Q2 Earnings: What's in the Cards?)
Facebook, Inc. Price and EPS Surprise
Facebook, Inc. price-eps-surprise | Facebook, Inc. Quote
Moreover, this social-network giant has a Zacks Rank #3 (Hold) and an Earnings ESP of +5.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Notably, per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Meanwhile, Paypal’s second-quarter 2020 results are expected to reflect strength in product lines, including Venmo and One Touch.
Total Payment Volume (TPV) is likely to have benefited from Venmo’s growing monetization efforts. Further, One Touch’s growing momentum among merchants on the heels of its robust mobile checkout services might have driven growth in PayPal’s mobile TPV in the second quarter. (Read More: Portfolio Strength to Benefit PayPal’s Q2 Earnings)
PayPal Holdings, Inc. Price and EPS Surprise
PayPal Holdings, Inc. price-eps-surprise | PayPal Holdings, Inc. Quote
Moreover, PayPal has a favorable combination of a Zacks Rank #3 and an Earnings ESP of +2.15%.
Tyler Technologies has a Zacks Rank of 3 and an Earnings ESP of +4.13%, which increases the chances of a beat.
However, the company’s second-quarter performance is likely to have been negatively impacted by economic and business disruptions due to the coronavirus crisis. Delays in procurement processes and lengthening sales cycles, as public sector entities are now more focused on pandemic-related issues, might reflect on revenue results for the quarter under review. (Read More: Tyler Technologies to Report Q2 Earnings: What to Expect?)
Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote
Meanwhile, momentum in online sales triggered by the coronavirus pandemic is expected to have driven Shopify’s second-quarter performance
The company is also anticipated to have gained from introduction of contactless payment hardware for Canadian retailers using new point of sale (POS) system, Shopify POS. This includes the Shopify Tap & Chip Card Reader, Shopify Tap & Chip Case and Shopify Retail Kit. (Read More: Will Expanding Merchant Base Aid Shopify's Q2 Earnings?)
Shopify Inc. Price and EPS Surprise
Shopify Inc. price-eps-surprise | Shopify Inc. Quote
However, Shopify has a Zacks Rank #2 but an Earnings ESP of 0.00% which dims possibilities of a beat.
ServiceNow’s second-quarter performance is expected to have benefited from the solid traction of the company’s IT service management and IT operations management solutions stemming from rapid digital transformation taking place across all industries due to the coronavirus-led remote work wave.
However, coronavirus-induced uncertainties are likely to have limited growth. Also, higher expenditure on product innovation and acquisitions are anticipitated to have exerted pressure on margins during the quarter under review.
ServiceNow, Inc. Price and EPS Surprise
ServiceNow, Inc. price-eps-surprise | ServiceNow, Inc. Quote
ServiceNow’s combination of a Zacks Rank #3 and an Earnings ESP of 0.00% lowers chances of an earnings beat. (Read More: ServiceNow to Report Q2 Earnings: What's in the Cards?)
Cognizant has a Zacks Rank #4 (Sell) and an Earnings ESP of +3.11%.
Markedly, Cognizant's business was largely disrupted in early April due to delays in project fulfillment as project delivery shifted to work from home in the first quarter. Additionally, in the wake of the ransomware attack, some clients opted to suspend Cognizant’s access to their networks, which resulted in decline in billings for the period.
Moreover, reduced client demand, primarily in the travel and hospitality industries hit by the coronavirus-led lockdown, is expected to have thwarted top-line growth in the soon-to-be-reported quarter. (Read More: Cognizant to Report Q2 Earnings: What's in Store?)
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation price-eps-surprise | Cognizant Technology Solutions Corporation Quote
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>