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2 Top-Ranked Pioneering Tech Stocks to Buy and Hold Forever
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Today’s episode of Full Court Finance at Zacks explores where the stock market sits amid the August pullback. The selling doesn’t feel great in the moment, but the downturn was needed to help cool things off. The drop also offers investors opportunities to buy great stocks at attractive levels. The two Zacks Rank #1 (Strong Buy) stocks we look at today are pioneers of key areas of the modern economy—Uber and Amazon—and investors might want to buy them now for long-term upside.
Stocks posted their third-straight drop on Thursday to take the S&P 500 and the Nasdaq deeper below their respective 50-day moving averages. The market began Friday trading on rough footing as well, with some starting to worry that the healthy and much-needed cooldown and recalibration might turn into something much worse.
Image Source: Zacks Investment Research
The August fall has been spurred by a mixture of profit-taking and updated inflation outlooks. That said, Jay Powell and the Fed remain near the end of their tightening cycle. Plus, the S&P 500’s earnings outlook for 2024 and 2025 is robust.
The near-term direction of the market is extremely difficult to determine. But we did see buyers step in on Friday as both the S&P 500 and the Nasdaq flirt with oversold RSI levels. Investors with long-term outlooks who can handle volatility and the possibility of more selling in the coming weeks might be well-served to buy strong stocks at solid entry points.
The stocks we look at today are highly-ranked tech names that forged new industries that are now entrenched in the economy.
Uber ((UBER - Free Report) ) did something in the second quarter that some on Wall Street thought the ride-hailing firm might never achieve: report a GAAP operating profit. Many are now cheering Uber’s ability to expand its ride-hailing and delivery businesses while also concentrating on the bottom line. Zacks estimates call for Uber’s revenue to jump 17% in 2023 and another 18% in FY24.
Zacks data projects its Monthly Active Platform Consumers will climb 11% to 146 million in 2023, with trips expected to grow by 21%. Uber is also projected to swing from an adjusted loss of -$4.65 a share last year to +$0.41 in FY23 and then post 160% adjusted earnings growth next year. Uber’s upbeat earnings outlook has it at a Zacks Rank #1 (Strong Buy) at the moment.
Image Source: Zacks Investment Research
Uber is focused on expanding its core ride-hailing and delivery businesses, which are booming as higher-income consumers continue to gravitate toward the platforms for convenience and more, while also looking to a future where autonomous vehicles dominate the roads.
Uber stock has climbed 50% in the last year and 80% YTD. Yet at $44.69 a share, Uber trades 30% below its all-time highs and 31% under its average Zacks price target.
On the valuation front, Uber trades at a 65% discount to its own highs at 2.2X forward sales and 43% below the Zacks tech sector. Plus, its PEG ratio, which factors in its bottom-line growth outlook, sits at 1.2 vs. tech’s 2.0. And it is currently trying to retake its 50-day moving average.
Amazon ((AMZN - Free Report) ) remains the titan of e-commerce and a cloud computing powerhouse despite its slowing growth. Amazon stock suffered through a deep downturn as investors told the company it was time to focus on running a more mature, stable business designed to turn consistent profits and grow.
CEO Andy Jassy has proven Amazon can pivot toward profits while maintaining its massive lead in e-commerce and investing in generative AI. Amazon crushed our Q2 earnings estimates by 85% in early August, marking the third-straight big bottom-line beat to prove its cost-cutting efforts are paying off.
Zacks estimates call for Amazon to post 11% revenue growth in FY23 and 13% higher in FY24 to go from $514 billion last year to $642 billion. And it is projected to post 200% adjusted earnings growth this year and another 34% next year. Plus, its positive EPS revisions help it land a Zacks Rank #1 (Strong Buy) right now.
Image Source: Zacks Investment Research
Amazon will continue to play major roles in the lives of both consumers and enterprises for the foreseeable future. This is part of the reason why 34 of the 39 brokerage recommendations Zacks has are “Strong Buys.” Amazon stock has climbed 820% in the last decade vs. the S&P 500’s 173%. Yet AMZN is down 18% over the last three years and trading nearly 30% from its peaks—despite charging 60% higher in 2023.
On the valuation front, Amazon is trading 60% below its highs in terms of forward 12-month earnings. And its PEG ratio marks 40% value vs. its five-year median and 75% below its own highs at 1.5 vs. the Zacks tech sector’s 1.9.
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2 Top-Ranked Pioneering Tech Stocks to Buy and Hold Forever
Today’s episode of Full Court Finance at Zacks explores where the stock market sits amid the August pullback. The selling doesn’t feel great in the moment, but the downturn was needed to help cool things off. The drop also offers investors opportunities to buy great stocks at attractive levels. The two Zacks Rank #1 (Strong Buy) stocks we look at today are pioneers of key areas of the modern economy—Uber and Amazon—and investors might want to buy them now for long-term upside.
Stocks posted their third-straight drop on Thursday to take the S&P 500 and the Nasdaq deeper below their respective 50-day moving averages. The market began Friday trading on rough footing as well, with some starting to worry that the healthy and much-needed cooldown and recalibration might turn into something much worse.
Image Source: Zacks Investment Research
The August fall has been spurred by a mixture of profit-taking and updated inflation outlooks. That said, Jay Powell and the Fed remain near the end of their tightening cycle. Plus, the S&P 500’s earnings outlook for 2024 and 2025 is robust.
The near-term direction of the market is extremely difficult to determine. But we did see buyers step in on Friday as both the S&P 500 and the Nasdaq flirt with oversold RSI levels. Investors with long-term outlooks who can handle volatility and the possibility of more selling in the coming weeks might be well-served to buy strong stocks at solid entry points.
The stocks we look at today are highly-ranked tech names that forged new industries that are now entrenched in the economy.
Uber ((UBER - Free Report) ) did something in the second quarter that some on Wall Street thought the ride-hailing firm might never achieve: report a GAAP operating profit. Many are now cheering Uber’s ability to expand its ride-hailing and delivery businesses while also concentrating on the bottom line. Zacks estimates call for Uber’s revenue to jump 17% in 2023 and another 18% in FY24.
Zacks data projects its Monthly Active Platform Consumers will climb 11% to 146 million in 2023, with trips expected to grow by 21%. Uber is also projected to swing from an adjusted loss of -$4.65 a share last year to +$0.41 in FY23 and then post 160% adjusted earnings growth next year. Uber’s upbeat earnings outlook has it at a Zacks Rank #1 (Strong Buy) at the moment.
Image Source: Zacks Investment Research
Uber is focused on expanding its core ride-hailing and delivery businesses, which are booming as higher-income consumers continue to gravitate toward the platforms for convenience and more, while also looking to a future where autonomous vehicles dominate the roads.
Uber stock has climbed 50% in the last year and 80% YTD. Yet at $44.69 a share, Uber trades 30% below its all-time highs and 31% under its average Zacks price target.
On the valuation front, Uber trades at a 65% discount to its own highs at 2.2X forward sales and 43% below the Zacks tech sector. Plus, its PEG ratio, which factors in its bottom-line growth outlook, sits at 1.2 vs. tech’s 2.0. And it is currently trying to retake its 50-day moving average.
Amazon ((AMZN - Free Report) ) remains the titan of e-commerce and a cloud computing powerhouse despite its slowing growth. Amazon stock suffered through a deep downturn as investors told the company it was time to focus on running a more mature, stable business designed to turn consistent profits and grow.
CEO Andy Jassy has proven Amazon can pivot toward profits while maintaining its massive lead in e-commerce and investing in generative AI. Amazon crushed our Q2 earnings estimates by 85% in early August, marking the third-straight big bottom-line beat to prove its cost-cutting efforts are paying off.
Zacks estimates call for Amazon to post 11% revenue growth in FY23 and 13% higher in FY24 to go from $514 billion last year to $642 billion. And it is projected to post 200% adjusted earnings growth this year and another 34% next year. Plus, its positive EPS revisions help it land a Zacks Rank #1 (Strong Buy) right now.
Image Source: Zacks Investment Research
Amazon will continue to play major roles in the lives of both consumers and enterprises for the foreseeable future. This is part of the reason why 34 of the 39 brokerage recommendations Zacks has are “Strong Buys.” Amazon stock has climbed 820% in the last decade vs. the S&P 500’s 173%. Yet AMZN is down 18% over the last three years and trading nearly 30% from its peaks—despite charging 60% higher in 2023.
On the valuation front, Amazon is trading 60% below its highs in terms of forward 12-month earnings. And its PEG ratio marks 40% value vs. its five-year median and 75% below its own highs at 1.5 vs. the Zacks tech sector’s 1.9.