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The sudden return of volatility to global stock markets has created buying opportunities in large-cap tech stocks as the sector’s investors look to rebound from recent selloffs. The world’s tech leaders have dominated Wall Street over the past two years, and now, investors might have a fresh chance to buy a few previously red-hot stocks at a discount.
Of course, this recent volatility has made some investors hesitant, with bearish traders quick to draw similarities between this latest tech rally and the infamous dot-com bubble of the late 90s and early 2000s.
However, unlike the dot-com bubble, there is real earnings and revenue growth fueling this tech rally. In fact, the average P/E ratio of our “Computer and Technology” sector currently sits at 20.8, which compares favorably to the dot-com era’s average that routinely soared into the 200s.
Another interesting trend in today’s tech rally is that, rather than obsessing over the next big thing, investors seem to rewarding tried-and-true brands for their respectable growth. This means that some of the strongest tech stocks are the household names that consumers already know and love.
With that said, check out these three blue chip tech stocks to buy now:
Cisco is a worldwide leader in the information technology industry. The company develops and sells networking hardware, telecommunications equipment, and other high-technology services and products. Cisco is currently sporting a Zacks Rank #2 (Buy) and is gearing up for another strong earnings season, with consensus estimates for the period trending upward and growth expected on the top and bottom lines.
Meanwhile, the stock is trading with a reasonable Forward P/E of 17.2, which comes at a discount to its industry’s average. The stock also has a PEG ratio of 2.9, so investors are getting a decent price for its EPS growth potential. Cisco also generates about $2.63 in cash per share and offers a dividend yield of roughly 3%.
Hewlett Packard Enterprise is an integrated systems company focused on enterprise offerings like IT solutions, servers, and cloud-based products. The old Hewlett Packard Company might have been more of a “blue chip” by definition, but the spinoff has created new efficiencies for HPE, and investors are getting on board with this Zacks Rank #2 (Buy) stock right now.
HPE currently sports a “B” grade for Value in our Style Scores System, and its P/E, PEG, and P/B ratios all trade at significant discounts compared to its industry. Analysts are also calling for HPE to post EPS growth of 46% in the current fiscal year, and its latest estimates have been trending higher.
Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. Its Embedded Processors make it a budding Internet of Things play, while its Analog solutions ensure it remains a diversified chip leader. TXN is currently sporting a Zacks Rank #1 (Strong Buy).
The company just posted adjusted earnings of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.11 per share. This has already inspired positive estimate revisions, and the firm’s outlook now looks stronger. EPS growth is now expected to reach 26.4% this fiscal year. Plus, the stock is trading at a reasonable 19x forward 12-month earnings.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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3 Blue Chip Tech Stocks to Buy Now
The sudden return of volatility to global stock markets has created buying opportunities in large-cap tech stocks as the sector’s investors look to rebound from recent selloffs. The world’s tech leaders have dominated Wall Street over the past two years, and now, investors might have a fresh chance to buy a few previously red-hot stocks at a discount.
Of course, this recent volatility has made some investors hesitant, with bearish traders quick to draw similarities between this latest tech rally and the infamous dot-com bubble of the late 90s and early 2000s.
However, unlike the dot-com bubble, there is real earnings and revenue growth fueling this tech rally. In fact, the average P/E ratio of our “Computer and Technology” sector currently sits at 20.8, which compares favorably to the dot-com era’s average that routinely soared into the 200s.
Another interesting trend in today’s tech rally is that, rather than obsessing over the next big thing, investors seem to rewarding tried-and-true brands for their respectable growth. This means that some of the strongest tech stocks are the household names that consumers already know and love.
With that said, check out these three blue chip tech stocks to buy now:
1. Cisco Systems, Inc. (CSCO - Free Report)
Cisco is a worldwide leader in the information technology industry. The company develops and sells networking hardware, telecommunications equipment, and other high-technology services and products. Cisco is currently sporting a Zacks Rank #2 (Buy) and is gearing up for another strong earnings season, with consensus estimates for the period trending upward and growth expected on the top and bottom lines.
Meanwhile, the stock is trading with a reasonable Forward P/E of 17.2, which comes at a discount to its industry’s average. The stock also has a PEG ratio of 2.9, so investors are getting a decent price for its EPS growth potential. Cisco also generates about $2.63 in cash per share and offers a dividend yield of roughly 3%.
2. Hewlett Packard Enterprise (HPE - Free Report)
Hewlett Packard Enterprise is an integrated systems company focused on enterprise offerings like IT solutions, servers, and cloud-based products. The old Hewlett Packard Company might have been more of a “blue chip” by definition, but the spinoff has created new efficiencies for HPE, and investors are getting on board with this Zacks Rank #2 (Buy) stock right now.
HPE currently sports a “B” grade for Value in our Style Scores System, and its P/E, PEG, and P/B ratios all trade at significant discounts compared to its industry. Analysts are also calling for HPE to post EPS growth of 46% in the current fiscal year, and its latest estimates have been trending higher.
3. Texas Instruments Inc. (TXN - Free Report)
Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. Its Embedded Processors make it a budding Internet of Things play, while its Analog solutions ensure it remains a diversified chip leader. TXN is currently sporting a Zacks Rank #1 (Strong Buy).
The company just posted adjusted earnings of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.11 per share. This has already inspired positive estimate revisions, and the firm’s outlook now looks stronger. EPS growth is now expected to reach 26.4% this fiscal year. Plus, the stock is trading at a reasonable 19x forward 12-month earnings.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>