The Nasdaq composite lost 1.24% to close at 14,980.94 on Dec 20, reflecting rising concerns over the spread of Omicron, further coronavirus-induced lockdowns, new travel restrictions as well as lack of federal support in the near term.
Nevertheless, the tech-heavy index is up 16.2% year to date, per data from CNN. The tech-heavy index had a scintillating 2020, returning 43.6% compared with 2019’s return of 35.2%. Nasdaq’s relatively muted returns this year can be attributed to raging inflation and Federal Reserve’s tighter monetary policy. Federal Reserve is now expected to raise interest rates three times in 2022 to combat inflation. However, tech stocks continued their momentum, primarily benefiting from changing consumer preferences and behavior. The stay-at-home trend has driven demand for web-based services like e-commerce, contactless payment and delivery. 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 have been a major positive. Per the latest data from The World Semiconductor Trade Statistics (WSTS), the world semiconductor market is expected to increase 25.6% over 2020, driven by strong demand for chips. For 2022, growth is currently projected at 8.8%. The 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 five tech stocks that have outperformed Nasdaq on a year-to-date basis. Apart from boasting strong fundamentals, these stocks carry 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. Year-to-Date Performance
Image Source: Zacks Investment Research
Top Tech Stocks Alpha & Omega Semiconductor’s ( AOSL Quick Quote AOSL - Free Report) shares are up 113.88% year to date. Alpha & Omega designs, develops and markets a broad range of power semiconductor ICs targeting high-volume end-market applications, such as notebooks, netbooks, flat panel displays, mobile phone battery packs, set-top boxes, portable media players and power supplies. Alpha & Omega currently flaunts a Zacks Rank of 1. The Zacks Consensus Estimate for this $1.33-billion company’s fiscal 2022 earnings is pegged at $4.08 per share, having been revised 19.6% upward in 60 days’ time. For fiscal 2023, the consensus mark for earnings has moved 13% north to $4.11 per share over the same time frame. Axcelis Technologies’ ( ACLS Quick Quote ACLS - Free Report) shares have returned 117.07% on a year-to-date basis. Axcelis designs, manufactures and services ion implantation and other processing equipment used to fabricate semiconductor chips. Axcelis sports a Zacks Rank #1 and has a market cap of $2.11 billion. The Zacks Consensus Estimate for its 2021 earnings has moved up 8.4% to $2.67 per share in the past 60 days. Over the same time frame, the consensus mark for 2022 earnings has climbed 12.2% to $3.41 per share. Synaptics’ ( SYNA Quick Quote SYNA - Free Report) shares have returned 172.01% year to date. Synaptics is a leader in designing and marketing human interface solutions such as touchpads for notebook computers, capactive touch screen controllers for handsets and biometric fingerprint sensors for mobile devices. Synaptics has a Zacks Rank #2 and a market cap of $10.30 billion. The consensus mark for its fiscal 2022 bottom line is pegged at $11.21 per share, up 12.1% in the past 60 days. For fiscal 2023, the consensus mark for earnings has moved 14.1% north to $12.45 per share over the same time frame. Transcat’s ( TRNS Quick Quote TRNS - Free Report) shares are up 157.24% on a year-to-date basis. Transcat is a leading provider of accredited calibration, repair, inspection, and laboratory instrument services. It also operates as a leading value-added distributor that sells and rents proprietary brand instruments to customers, primarily in North America. This $670.75-million company currently carries a Zacks Rank #2. The consensus mark for fiscal 2021 earnings is currently pegged at $1.77 per share, having moved 3% north in the past 60 days. For fiscal 2021, the consensus mark for earnings has moved 7.1% north to $2.10 per share over the same time frame. Perficient’s ( PRFT Quick Quote PRFT - Free Report) shares have returned 155.78% on a year-to-date basis. This digital consultancy provider is riding on an expanding customer base. Strong demand for Perficient’s global delivery model (40% of delivery resources are offshore) has been a key catalyst. Perficient has a Zacks Rank #2 and a market cap of $4.01 billion. The Zacks Consensus Estimate for its 2021 earnings has moved up 3% to $3.40 per share in the past 60 days. Over the same time frame, the consensus mark for 2022 earnings has climbed 6% to $4.05 per share.