After several months of volatility, tech-heavy indexes are back near their all-time highs, and bullish investors look ready to push things even higher. The world’s tech leaders have dominated Wall Street over the past two years, and now, investors might have a fresh chance to buy these red-hot stocks as they look to establish a new range.
Of course, this year’s 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 22.2, which compares favorably to the dot-com era’s average that soared into the 100s for a few weeks.
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. Apple Inc. (AAPL - Free Report)
Tech behemoth and iPhone maker Apple has become a backbone stock for many investors in recent years, and the company is well on its way to reaching the $1 trillion market cap threshold for the first time ever. Plus, the stock is sporting a Zacks Rank #2 (Buy) and has its eyes set on the near and distant future.
Indeed, Apple is reportedly poised to introduce three new iPhones in early September, underscoring its new model which places the flagship smartphone at the center of diverse ecosystem of other devices and services, such as the Apple Watch, AirPods, and Apple Music.
And after another great quarter, Apple has seen a tidal wave of positive estimate revisions for future fiscal periods, indicating that analysts are still growing more bullish on the company. Investors also have an opportunity to get in on the cheap, with shares trading at just 18.7x forward earnings right now.
3. Microsoft Corporation (MSFT - Free Report)
Apple may have reached the $1 trillion market cap threshold first, but not far behind it and a few other gargantuan tech companies sits Microsoft, a software pioneer in the midst of a cloud-computing-back rejuvenation. Microsoft is coming off another solid quarter, tallying better-than-expected earnings and revenue results and growth of 89% in its Azure cloud division.
Microsoft’s great quarter—and ensuing analyst revisions—have earned the stock a Zacks Rank #1 (Strong Buy). Positive estimate revisions for 2019 and 2020 have been pouring in, and the stock is surging higher. However, with a PEG ratio of 2.1, MSFT does not seem overvalued when considering its impressive growth opportunities.
3. Texas Instruments Incorporated (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 #2 (Buy).
Texas Instruments tells a classic growth and income story right now. For a firm of its size, it’s still improving the top and bottom lines well, with earnings and revenue expected to improve by 32% and 8%, respectively, this year. Meanwhile, the company has a healthy cash flow and pays out a strong dividend. Its yield is about 2.2% right now.
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