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3 Big Tech Stocks to Buy in March and Hold Forever

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Today’s episode of Full Court Finance at Zacks explores where the market stands roughly a week after the Silicon Valley Bank collapse. The episode also breaks down why Wall Street is diving back into large cap technology stocks amid the recent stock market turmoil before we dig into why investors might want to buy Adobe, Intuit, and Meta Platform shares in March and hold them for the long haul.

The last two weeks have been a rather insane up-and-down ride, marked by fears of a possible banking sector contagion and hopes of a more dovish Fed. Despite the drop to end the week, the Nasdaq has ripped higher since last Friday amid the rotation back into big tech as interest rates tumble and the banking sector gets clobbered.

Thankfully for the market, the Fed and U.S. officials took rather extraordinary measures to nip any potential wide-scale banking and financial crisis in the bud. Despite the backstops and help from larger institutions, plenty of fear still surrounds the regional banking sector.

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Tech giants continue to pop as investors feel more confident in a Fed pivot and the ability for these firms to grow throughout the decade no matter the economic environment.

The Nasdaq is up roughly 13% in 2023 and back above both its 50-day and 200-day moving averages. Plus, the Nasdaq just experienced a so-called golden cross—when the shorter-term moving average climbs above the longer-term trend—which technical traders see as a bullish signal.

Wall Street is betting that Jay Powell and the Fed start to lower rates by the summer. And the recently tumbling 2-year and 10-year U.S. Treasury yields have investors feeling more confident in buying growth-focused tech stocks, especially at their greatly recalibrated valuations.

The first stock we explore is Adobe ((ADBE - Free Report) ) after it topped our Q1 FY23 estimates on March 15. The creative software powerhouse also crucially raised its annual targets despite wider economic slowdown fears. Adobe’s portfolio includes Photoshop, Premiere Pro, and other creative offerings, as well as a documents/business portfolio that features PDFs, marketing, and beyond.

Adobe is the champion of a vital segment of the software market that’s helped it post between 12% to 25% revenue growth for eight straight years. Zacks estimates call for sales to grow another 9% in FY23 and 11% in FY24 to boost adjusted earnings by double digits. ADBE is also hoping its deal to buy collaboration software standout Figma is approved by regulators.  

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ADBE, which currently lands a Zacks Rank #3 (Hold), has soared 725% in the last 10 years vs. the Zacks tech sector’s 220%. Despite the overall run and its comeback over the last six months, Adobe still trades roughly 50% below its peaks. And it just bounced back above both its 50-day and 200-day moving averages. ADBE’s falling price, coupled with its strong earnings outlook, has it trading right near its recent decade long-lows at 27.9X forward earnings.

Intuit ((INTU - Free Report) is likely best known for TurboTax, but it also bought Credit Karma and Mailchimp over the last several years. Inuit now provides email marketing, digital-ad services, customer-relationship-management tools, credit scores, and other personal financial services, alongside tax, accounting, and other business-focused financial services software.

Intuit, which lands a Zacks Rank #3 (Hold) right now, crushed our Q2 FY23 EPS estimates in late February and is projected to post roughly 11% sales growth this year and next to extend its streak of double-digit revenue growth to a decade. INTU’s adjusted EPS are projected to climb by 16% and 13%, respectively.

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Intuit has soared 530% in the past 10 year vs. the Zacks tech sector’s 220%. Yet investors can scoop up INTU 15% below its average Zacks price target and around 40% under its own highs. In terms of valuation, Intuit trades right near its own 10-year median and at a 50% discount to its highs.

Meta Platforms ((META - Free Report) ), formerly Facebook, has been on an elevator ride up since November as the firm finally committed to cutting costs as its top-line growth slows. Meta, like Amazon and others over-hired during the pandemic boom. Meta said in mid-March that would cut another roughly 10K jobs in the coming months in what Mark Zuckerberg is calling the “year of efficiency.”

The social media titan’s disappointing 2022 is now in the rearview and it is ready to return to top and bottom line growth as it focuses once again on its core businesses Facebook, Instagram, and WhatsApp, all of which will bounce back from a bad year for digital advertising because its reach is out of this world. Meta’s ‘monthly active people’ popped 4% in Q4 to 3.74 billion, while daily active users jumped up 5% to 2.96 billion, or nearly 40% of the world.

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Meta’s soaring earnings outlook helps it land a Zacks Rank #1 (Strong Buy). The company also boasts a strong balance sheet and it is buying back tons of stock. The stock has skyrocketed over 100% since early November, yet Meta is still trading below where it was prior to the covid selloff and around 50% off its highs. And it is trading at a discount to the Zacks Tech sector at 19.9X forward earnings. 

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