Inflation woes are refusing to abate and the ongoing anticipation of a rate hike in the upcoming policy meeting of the Federal Reserve to curb inflationary pressure is making the market jittery, as depicted by a 14.8%, 26.16% and 18.15%, respective year-to-date decline in the Dow Jones Industrial Average, Nasdaq Composite and S&P 500.

The August Consumer Price Index (CPI: an indicator of inflation) increased 8.3% year over year. The figure exceeded the 8.1% expectation of analysts despite the 10.6% decline in gasoline prices. The Fed had already indicated last month that rate hikes will continue until inflation is at least down close to the 2% target rate. The central bank’s hawkish stance on taming the sky-high inflation has stoked fears of an economic slowdown.

Although the market is likely to be choppy through the second half of 2022, there will be opportunities to earn in the equity market if well-researched investment strategies are adopted. Such strategies will enhance investors’ stock-picking ability, stabilize their portfolio and significantly reduce risks and the impacts of uncertainty.

The widely-diversified tech sector holds the potential to defy recessionary woes and minimize the anticipated contraction of the world economy despite rising interest rates and log-jammed supply chains.

Each and every dip in the market will be a good opportunity to enter the same and tap gains from several stocks, especially in the Zacks Computer and Technology sector, like STMicroelectronics (STM Quick QuoteSTM - Free Report) , Fortinet (FTNT Quick QuoteFTNT - Free Report) , Zscaler (ZS Quick QuoteZS - Free Report) and Synopsys (SNPS Quick QuoteSNPS - Free Report) . These stocks have become highly attractive at their current valuation. Many of these stocks have strong upside left for the rest of 2022, especially those offering hybrid-working tech, cloud services and cybersecurity solutions, which support work from home, online learning and remote health diagnosis.

Our Top Picks

With the help of the Zacks Stock Screener, we have selected four large-cap tech stocks (market cap greater than $10 billion) that are well-poised to grow in the rest of 2022. Large caps have strong fundamentals that help them stay afloat in a turbulent economic and business environment.

Apart from robust earnings estimate revisions, they have a favorable combination of a VGM Score of A or B and a Zacks Rank #1 (Strong Buy) or 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.

STMicroelectronics N.V. is benefitting from solid demand for the company’s robust microcontrollers, sensors, power, analog and other connectivity products. The growing uptake of motion and environmental sensors, time-of-flight ranging sensors, wireless charging products, touch display controllers, and secure solutions in smartphones is anticipated to aid its performance in the personal electronics market in the near term. The strong momentum in design wins of smartwatches and other wearables is a positive.

Increasing demand in the automotive product group across all geographies is expected to boost the company’s performance in the rest of 2022. Growing electrification and digitalization of the automotive industry are expected to remain a tailwind. Strong design wins, with ST power modules in electronic vehicle applications, are likely to drive its growth in the automotive market in the near term. Strengthening of customer engagements in cellular and satellite communication infrastructure is driving STM’s performance in the communications equipment, computer and peripherals market.

The company sports a Zacks Rank #1 and has a VGM Score of B. The Zacks Consensus Estimate for 2022 earnings stands at $3.88 per share, having increased 16.5% in the past 60 days.

Synopsys is benefiting from strong design wins owing to a robust product portfolio. The company’s penetration into new and growing AI chip companies is a major growth driver. With the increasing need for enhanced security measures, considering the rising security threats in interconnected systems laden with software, demand for Synopsys’ solutions is shooting up. Robust growth in software-based verification at both traditional semiconductor and emerging system companies focused on their in-house design is an upside.

Growth in the work-and-learn-from-home trend is driving demand for bandwidth. Synopsys Fusion Design Platform, launched last November, is witnessing high demand, helping it generate strong results. Growing demand for advanced technology, design, IP and security solutions is also creating solid prospects. The company’s Verification Continuum platform steadily witnesses excellent demand and competitive wins. Further, ZeBu Server 4 product is witnessing broad-based adoption among customers for designing storage, networking and AI chips.

Synopsys, a Zacks Rank #2 company, has a VGM Score of B. The Zacks Consensus Estimate for fiscal 2022 earnings has moved 4.4% north to $8.84 per share over the past 60 days.

Fortinet is benefiting from the increased adoption of its networking and security platforms, driven by a rise in the hybrid working policy among top-notch companies. This Zacks Rank #2 company continues to win back-to-back deals for offering unique cyber safety solutions, which ensure the blocking of attacks or malicious content. Its Fortinet Security Fabric, cloud and Software-defined Wide Area Network (SD-WAN) offerings are currently witnessing robust growth.

The growing adoption of SD-WAN solutions is a key growth driver for Fortinet in the long run. According to the latest Future Market Insights report, the market size for SD-WAN solutions is likely to reach $53.8 billion by 2032 from $3.4 billion in 2022, indicating a CAGR of 31.6% during the 2022-2032 forecast period. As only a few vendors offer security and SD-WAN solution, Fortinet is well-positioned to capitalize on the increasing opportunities in the market.

Fortinet has a VGM Score of B. The Zacks Consensus Estimate for 2022 earnings stands at $1.05 per share, having moved a penny north in the past 60 days.

Zscaler is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches. The increasing demand for privileged access security on digital transformation and cloud-migration strategies is a key growth driver. Zscaler’s portfolio strength boosts its competitive edge and helps add users. Moreover, a strong presence across verticals, such as banking, insurance, healthcare, public sector, pharmaceuticals, telecommunications services and education, is safeguarding Zscaler from the pandemic’s negative impact. Zscaler is well positioned to capitalize on the increasing opportunities in the SD-WAN solutions market. Additionally, the company’s collaboration with both VMware and Silver Peak is helping it secure SD-WAN deployments.

This Zacks Rank #2 company has also made a few important acquisitions to build its product portfolio and stimulate growth. The acquisition of Smokescreen will enhance Zscaler’s Zero Trust Exchange and Advanced Active Defense capabilities. The purchase of Trustdome will help Zscaler provide a comprehensive solution to reduce public cloud attack surfaces and improve security posture.

Zscaler has a VGM Score of B. The Zacks Consensus Estimate for 2022 earnings stands at $1.17 per share, having increased 13.6% in the past 60 days.