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 21.0, 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. Nvidia Corporation (NVDA - Free Report)
Thanks to its strategic investments in datacenters and artificial intelligence, Nvidia has emerged as one of Wall Street’s most popular stocks. Of course, the company’s industry-leading GPUs remain its backbone and are the number one choice for PC gamers worldwide. Nvidia shares have gained over 78% within the past year, and now that the stock sports a Zacks Rank #1 (Strong Buy), it is showing few signs of stopping.
Nvidia is still in an aggressive growth cycle, with current estimates calling for the firm to see EPS and revenue growth of 61% and 36%, respectively, this fiscal year. And of course, Nvidia has made a habit out of crushing expectations. Management is also improving its finances, generating cash flow growth of nearly 67%. Valuations are stretched, but investors should be willing to pay a premium for a company with Nvidia’s proven success and continued potential.
2. Amazon.com, Inc. (AMZN - Free Report)
Amazon does not need much of an introduction, but investors should always remember that the company has its hands in much more than just the e-commerce business that brought it fame. The Seattle-based firm is now a legitimate brick-and-mortar retailer, cloud computing provider, entertainment media publisher, and more. AMZN is also currently sporting a Zacks Rank #2 (Buy).
Amazon’s track record speaks for itself, as shares have gained nearly 60% in the trailing one-year period. The stock has shrugged off market-wide volatility and continues to test new highs. Earnings are expected to improve by a staggering 165% this year, with sales surging nearly 34%. AMZN is a staple stock that should appease investors looking for near-term strength and long-term, buy-and-hold gains.
3. SAP SE (SAP - Free Report)
SAP is one of the largest software companies in the world. It makes one of the most recognizable enterprise platforms around and dominates the business operations and customer relations markets. Based in Germany, SAP is also one of the most important European stocks to follow. SAP is holding a Zacks Rank #1 (Strong Buy) and looks like another solid large-cap name right now.
SAP is less pricey than the other stocks on this list, with shares trading at just 22x forward 12-month earnings. The company generates about $5.43 in cash per share and is witnessing cash flow growth of about 25%. SAP also sticks out thanks to its solid net margin of 18%, giving it one of the stronger balance sheets in the industry.
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