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Will 2020 Be Nasdaq's Best Year This Decade? 4 Tech Picks
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The Nasdaq composite climbed 1.25% to close at a new high of 12,595.06 on Dec 15. Notably, the tech-heavy index is up 40.4% year to date and is on track to post best returns for the decade ending 2020.
Markedly, Nasdaq had a scintillating 2019, returning 35.2% against 2018’s decline of 3.9%. Per this chart from macrotrends, 2013 has been the best year this decade. The index is well-positioned to surpass this in 2020 given tech momentum, Pfizer’s vaccine approval and improving chances of a second stimulus bill prior to Christmas.
Moreover, by keeping interest rates low for a foreseeable future, the Federal Reserve is expected to reiterate its long-term commitment to support the economy ravaged by the coronavirus outbreak in this year’s final Federal Open Market Committee (FOMC) meeting. The lower rates will make it easier for consumers as well as businesses to avail loans, thereby driving consumption. Increased consumption also bodes well for Nasdaq.
Tech’s Momentum to Boost Nasdaq’s Prospects
Tech’s resiliency has been instrumental in pulling Nasdaq from the March lows amid the coronavirus outbreak. Tech stocks have primarily benefited from changing consumer preference and behavior. The stay-at-home trend has driven demand for web-based services like e-commerce, contactless payment and delivery.
Moreover, companies offering remote-working tech, cloud services and cybersecurity solutions, which support work-from-home, online learning and remote health diagnosis, are expected to continue to benefit over the long haul.
Further, improving global semiconductor sales is a major positive. Per the latest data from The World Semiconductor Trade Statistics (WSTS), the world semiconductor market is expected to increase 5.1% from 2019 driven by memory and sensors. For 2021, growth is currently projected at 8.4% based on double-digit growth of memory and optoelectronics.
Additionally, rapid adoption of cloud computing along with the ongoing infusion of AI and machine learning as well as the accelerated deployment of 5G technology, autonomous vehicles, AR/VR and wearables are major positives.
Per the Zacks’ proprietary methodology, stocks with such a perfect mix of elements offer solid investment opportunities.
Notably, each of these tech stocks has a market cap of more than $1 billion and has outperformed Nasdaq on a year-to-date basis.
Year-to-Date Performance
Top Tech Bets
The Trade Desk (TTD - Free Report) is benefiting from the momentum in programmatic ad buying. Further, the emergence of digital content boosted the usage of this company’s inventory across all forms of ConnectedTV (“CTV”). Moreover, recovering ad demand and spending scenario is expected to drive the top line.
The Trade Desk currently flaunts a Zacks Rank of 1 and a Growth Score of B. The Zacks Consensus Estimate for this $43.32-billion company’s 2020 earnings is pegged at $4.44 per share, having been revised 52% upward in 60 days’ time. For 2021, the consensus mark for earnings has moved 21.2% north to $4.58 per share over the same time frame.
Digital Turbine (APPS - Free Report) is benefiting from robust demand for its cloud-based mobile software offerings as enterprises continued the shift from on-premise to cloud environments, especially amid the coronavirus lockdown.
Moreover, this Zacks Rank #2 company’s diversified partner base, a large content business partner and rollouts with newer international partners are expected to drive the top line.
Digital Turbine has a Growth Score of A and market cap of $4.16 billion. The Zacks Consensus Estimate for its fiscal 2021 earnings has moved up 34% to 63 cents per share in the past 60 days. Over the same time frame, the consensus mark for fiscal 2022 earnings has climbed 34% to 86 cents per share.
Vocera Communications is benefiting from strong demand for its Smartbadge and Badge among caregivers in hospitals amid the rising number of coronavirus infections. This Zacks Rank #2 company’s solutions are helping healthcare providers boost operational efficiency as well as enhance patient experience. Markedly, Vocera Smartbadge has been named in TIME’s list of the 100 Best Inventions of 2020.
Vocera has a Growth Score B and market cap of $1.13 billion. The consensus mark for its 2020 bottom line is pegged at 22 cents per share, up 80.8% in the past 60 days. For 2021, the consensus mark for earnings has moved 33.3% north to 56 cents per share over the same time frame.
Cohu (COHU - Free Report) is gaining from the rising demand for its semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems in the wireless mobility market. Improving automotive and industrial, and rising demand for EVs bode well for the company. The company has a market cap of $1.52 billion.
Cohu currently carries a Zacks Rank #2 and a Growth Score of A. The consensus mark for 2020 earnings is currently pegged at $1.07 per share, having moved 102% north in the past 60 days. For 2021, the consensus mark for earnings has moved 94% north to $2.54 per share over the same time frame.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Will 2020 Be Nasdaq's Best Year This Decade? 4 Tech Picks
The Nasdaq composite climbed 1.25% to close at a new high of 12,595.06 on Dec 15. Notably, the tech-heavy index is up 40.4% year to date and is on track to post best returns for the decade ending 2020.
Markedly, Nasdaq had a scintillating 2019, returning 35.2% against 2018’s decline of 3.9%. Per this chart from macrotrends, 2013 has been the best year this decade. The index is well-positioned to surpass this in 2020 given tech momentum, Pfizer’s vaccine approval and improving chances of a second stimulus bill prior to Christmas.
Moreover, by keeping interest rates low for a foreseeable future, the Federal Reserve is expected to reiterate its long-term commitment to support the economy ravaged by the coronavirus outbreak in this year’s final Federal Open Market Committee (FOMC) meeting. The lower rates will make it easier for consumers as well as businesses to avail loans, thereby driving consumption. Increased consumption also bodes well for Nasdaq.
Tech’s Momentum to Boost Nasdaq’s Prospects
Tech’s resiliency has been instrumental in pulling Nasdaq from the March lows amid the coronavirus outbreak. Tech stocks have primarily benefited from changing consumer preference and behavior. The stay-at-home trend has driven demand for web-based services like e-commerce, contactless payment and delivery.
Moreover, companies offering remote-working tech, cloud services and cybersecurity solutions, which support work-from-home, online learning and remote health diagnosis, are expected to continue to benefit over the long haul.
Further, improving global semiconductor sales is a major positive. Per the latest data from The World Semiconductor Trade Statistics (WSTS), the world semiconductor market is expected to increase 5.1% from 2019 driven by memory and sensors. For 2021, growth is currently projected at 8.4% based on double-digit growth of memory and optoelectronics.
Additionally, rapid adoption of cloud computing along with the ongoing infusion of AI and machine learning as well as the accelerated deployment of 5G technology, autonomous vehicles, AR/VR and wearables are major positives.
Here we pick four Nasdaq-listed tech stocks that apart from boasting strong fundamentals have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Per the Zacks’ proprietary methodology, stocks with such a perfect mix of elements offer solid investment opportunities.
Notably, each of these tech stocks has a market cap of more than $1 billion and has outperformed Nasdaq on a year-to-date basis.
Year-to-Date Performance
Top Tech Bets
The Trade Desk (TTD - Free Report) is benefiting from the momentum in programmatic ad buying. Further, the emergence of digital content boosted the usage of this company’s inventory across all forms of ConnectedTV (“CTV”). Moreover, recovering ad demand and spending scenario is expected to drive the top line.
The Trade Desk currently flaunts a Zacks Rank of 1 and a Growth Score of B. The Zacks Consensus Estimate for this $43.32-billion company’s 2020 earnings is pegged at $4.44 per share, having been revised 52% upward in 60 days’ time. For 2021, the consensus mark for earnings has moved 21.2% north to $4.58 per share over the same time frame.
Digital Turbine (APPS - Free Report) is benefiting from robust demand for its cloud-based mobile software offerings as enterprises continued the shift from on-premise to cloud environments, especially amid the coronavirus lockdown.
Moreover, this Zacks Rank #2 company’s diversified partner base, a large content business partner and rollouts with newer international partners are expected to drive the top line.
Digital Turbine has a Growth Score of A and market cap of $4.16 billion. The Zacks Consensus Estimate for its fiscal 2021 earnings has moved up 34% to 63 cents per share in the past 60 days. Over the same time frame, the consensus mark for fiscal 2022 earnings has climbed 34% to 86 cents per share.
Vocera Communications is benefiting from strong demand for its Smartbadge and Badge among caregivers in hospitals amid the rising number of coronavirus infections. This Zacks Rank #2 company’s solutions are helping healthcare providers boost operational efficiency as well as enhance patient experience. Markedly, Vocera Smartbadge has been named in TIME’s list of the 100 Best Inventions of 2020.
Vocera has a Growth Score B and market cap of $1.13 billion. The consensus mark for its 2020 bottom line is pegged at 22 cents per share, up 80.8% in the past 60 days. For 2021, the consensus mark for earnings has moved 33.3% north to 56 cents per share over the same time frame.
Cohu (COHU - Free Report) is gaining from the rising demand for its semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors and thermal sub-systems in the wireless mobility market. Improving automotive and industrial, and rising demand for EVs bode well for the company. The company has a market cap of $1.52 billion.
Cohu currently carries a Zacks Rank #2 and a Growth Score of A. The consensus mark for 2020 earnings is currently pegged at $1.07 per share, having moved 102% north in the past 60 days. For 2021, the consensus mark for earnings has moved 94% north to $2.54 per share over the same time frame.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>