The tech-heavy Nasdaq Composite Index has turned from an outperformer to a laggard. This is especially true as the broad technology sell off lately has eroded all the gains made this year and sent the index into red. In fact, the Nasdaq is down nearly 10% from its February peak, signaling that it has entered into a correction territory.
The plunge was the result of a spike in Treasury yields, which led to fears of overvaluation in the tech stocks after an astounding performance during the pandemic. This is especially true as the sector relies on easy borrowing for superior growth and its value depends heavily on future earnings. Thus, a rise in long-term yields lowers the present value of companies’ future earnings. The 10-year yield, which began 2021 at 0.930%, hit a high of 1.614% on Feb 25 and is currently hovering around 1.55%. Additionally, Tesla’s ( crazy rally, which powered the technology sector last year, has fizzled out. The stock is down 7% year to date. Further, with the pandemic seemingly ending with faster vaccination rollout and further stimulus hopes, consumers can return to pre-pandemic habits, thereby hurting the sector’s performance. TSLA Quick Quote TSLA - Free Report) While most stocks on the Nasdaq index are in deep red, a few are still up from the year-to-date look. Below we have highlighted those five stocks that have gained more than 50% so far this year and are poised to continue their bullish trend given that these have a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here Diamondback Energy Inc. ( FANG Quick Quote FANG - Free Report) – Up 67.9% It is an independent oil and natural gas company focused on the acquisition, development, exploration and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas. The stock saw solid earnings estimate revision of 70 cents over the past month for this year and has an estimated growth rate of 91.78%. The stock has a Zacks Rank #1 and Momentum Score of B. Coherent Inc. ( COHR Quick Quote COHR - Free Report) – Up 56% This American company, designs, manufactures and markets laser systems and components, laser measurement and control products, optics, and laser accessories, which are used both in industry and scientific research. The stock has seen solid earnings estimate revision of 37 cents for fiscal year (ending September 2021) over the past one month and has an estimated earnings growth rate of 84.67%. Coherent has a Zacks Rank #2 and Growth Score of A. Criteo S.A. ( CRTO Quick Quote CRTO - Free Report) – Up 55.4% This global technology company is specialized in performance display advertising. The stock has witnessed positive earnings estimate revision of 46 cents for this year in a month but has an expected earnings decline rate of 3.2%. It has a Zacks Rank #1. Atea Pharmaceuticals Inc. ( AVIR Quick Quote AVIR - Free Report) – Up 50.9% This clinical-stage biopharmaceutical company is focused on discovering, developing and commercializing antiviral therapeutics to improve the lives of patients suffering from life-threatening viral infections. The stock has no earnings estimate revision for this year over the past one month and has an estimated earnings growth rate of 164%. It has a Zacks Rank #2. Sleep Number Corporation ( SNBR Quick Quote SNBR - Free Report) – Up 50.4% This company provides sleep solutions and services in the United States. It designs, manufactures, markets, retails and services beds, pillows, sheets and other bedding product under the Sleep Number name. The stock saw solid earnings estimate revision of $1.68 over the past month for this year and has an estimated growth rate of 24.49%. Sleep Number has a Zacks Rank #1 and Growth Score of B. Time to Invest in Legal Marijuana
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