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5 High Growth Tech Stocks to Buy on Signs of Cooling Inflation
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Prices of essential goods and services are, at the moment, moving in a more pleasant direction for American consumers. This is because inflation moderated substantially in March, thanks to a decline in gas prices that provided households with much-needed relief.
The U.S. Bureau of Labor Statistics noted that the Consumer Price Index (CPI) increased 5% year over year in March, compared to February’s 6% and way less than June’s peak of 9.1%. Subsequently, this turned out to be the smallest 12-month increase since May 2021, when energy and food prices scaled upward due to Russia’s invasion of Ukraine.
Stripping out the volatile components such as energy and food prices, the core CPI did increase, but on the surface, price pressures are certainly easing. What’s more, wholesale prices in the United States, as measured by the Producer Price Index (PPI), were down 0.5% month over month in March, the biggest decline since the beginning of the coronavirus pandemic in early 2020.
Over the past 12-month period, the PPI advanced by 2.7% in March, less than 4.9% in the prior month, and registered its lowest reading since January 2021. The so-called core wholesale prices, too, eased, indicating that broader price pressures are cooling from a decades-high level reached last summer.
Thus, a slowdown in inflation may sooner or later compel the Federal Reserve to curb the pace of interest rate hikes, and not push the economy into a recession at a time when U.S. banks are facing the risk of a credit crunch. Lest we forget, the central bank had already unleashed a slew of interest rate increases last year to bring down the elevated inflation.
Meanwhile, the likelihood of slower interest rate increases bodes well for growth-oriented tech stocks. After all, tech stocks’ future cash inflows get impacted because of higher interest rates, thereby reducing their reinvestments into innovation and hampering growth prospects. Simultaneously, interest rate hikes increase tech companies’ cost of borrowing, which burns cash and widens losses.
Nonetheless, with tech stocks now poised to roar back to life, it’s prudent for investors to place bets on solid tech companies such as Analog Devices (ADI - Free Report) , Broadcom (AVGO - Free Report) , Adobe (ADBE - Free Report) , Asure Software (ASUR - Free Report) , and MSCI (MSCI - Free Report) for superb returns.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal, and digital signal processing integrated circuits. ADI has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 10.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 10.8%.
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices. AVGO has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 9.9%.
Adobe is one of the largest software companies in the world. ADBE has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.4%.
Asure Software offers Web-based workforce management solutions that enable organizations to manage their office environment. ASUR has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 25% over the past 60 days. The company’s expected earnings growth rate for the current year is 133.3%.
MSCI provides investment decision support tools, including indexes, portfolio construction, and risk management products and services. MSCI has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.3%.
Shares of Analog Devices, Broadcom, Adobe, Asure Software, and MSCI have already gained 15.6%, 12.2%, 12.3%, 78.7%, and 15.6%, respectively, so far this year.
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5 High Growth Tech Stocks to Buy on Signs of Cooling Inflation
Prices of essential goods and services are, at the moment, moving in a more pleasant direction for American consumers. This is because inflation moderated substantially in March, thanks to a decline in gas prices that provided households with much-needed relief.
The U.S. Bureau of Labor Statistics noted that the Consumer Price Index (CPI) increased 5% year over year in March, compared to February’s 6% and way less than June’s peak of 9.1%. Subsequently, this turned out to be the smallest 12-month increase since May 2021, when energy and food prices scaled upward due to Russia’s invasion of Ukraine.
Stripping out the volatile components such as energy and food prices, the core CPI did increase, but on the surface, price pressures are certainly easing. What’s more, wholesale prices in the United States, as measured by the Producer Price Index (PPI), were down 0.5% month over month in March, the biggest decline since the beginning of the coronavirus pandemic in early 2020.
Over the past 12-month period, the PPI advanced by 2.7% in March, less than 4.9% in the prior month, and registered its lowest reading since January 2021. The so-called core wholesale prices, too, eased, indicating that broader price pressures are cooling from a decades-high level reached last summer.
Thus, a slowdown in inflation may sooner or later compel the Federal Reserve to curb the pace of interest rate hikes, and not push the economy into a recession at a time when U.S. banks are facing the risk of a credit crunch. Lest we forget, the central bank had already unleashed a slew of interest rate increases last year to bring down the elevated inflation.
Meanwhile, the likelihood of slower interest rate increases bodes well for growth-oriented tech stocks. After all, tech stocks’ future cash inflows get impacted because of higher interest rates, thereby reducing their reinvestments into innovation and hampering growth prospects. Simultaneously, interest rate hikes increase tech companies’ cost of borrowing, which burns cash and widens losses.
Nonetheless, with tech stocks now poised to roar back to life, it’s prudent for investors to place bets on solid tech companies such as Analog Devices (ADI - Free Report) , Broadcom (AVGO - Free Report) , Adobe (ADBE - Free Report) , Asure Software (ASUR - Free Report) , and MSCI (MSCI - Free Report) for superb returns.
These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have a Growth Score of A or B, a combination that offers the best opportunities in the growth investing space. You can see the complete list of today’s Zacks Rank #1 stocks here.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal, and digital signal processing integrated circuits. ADI has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 10.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 10.8%.
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices. AVGO has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 9.9%.
Adobe is one of the largest software companies in the world. ADBE has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.4%.
Asure Software offers Web-based workforce management solutions that enable organizations to manage their office environment. ASUR has a Zacks Rank #1 and a Growth Score of A.
The Zacks Consensus Estimate for its current-year earnings has moved up 25% over the past 60 days. The company’s expected earnings growth rate for the current year is 133.3%.
MSCI provides investment decision support tools, including indexes, portfolio construction, and risk management products and services. MSCI has a Zacks Rank #2 and a Growth Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 12.3%.
Shares of Analog Devices, Broadcom, Adobe, Asure Software, and MSCI have already gained 15.6%, 12.2%, 12.3%, 78.7%, and 15.6%, respectively, so far this year.
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