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Top Tech Predictions for 2020

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The next decade is expected to see an increase in edge computing, courtesy of the telecom industry’s 5G rollout. Quantum computing won’t be in theory only, but will also be applied practically.

But over the next 12 months, topics such as 5G, cloud and SaaS will dominate the tech space. Most importantly, we have highlighted four tech predictions for the near term. Take a look —

After a Solid 2019, Apple Still Has Room to Run

Apple Inc. (AAPL - Free Report) had a terrific 2019. Shares of the iPhone maker surged 86% to close at $293 a share last year, making it the best-performing stock listed on the Dow. And the stellar run is far from over. In fact, renowned tech analyst Gene Muster expects Apple’s worth to reach more $100 this year.

What’s more, Apple is expected to be the best FANNG stock this year. This is because the iPhone maker will continue to benefit from momentum in its non-iPhone businesses, particularly Services and Wearables, strong adoption of Apple Pay and a growing Apple Music subscriber base.

In the wearables pace, Apple Watch continues to dominate the global smartwatch market. After all, Apple Watch’s market share surged to 48% in the third quarter of 2019 from 45% in the second quarter. Notably, the company expects to be a market leader in the wearables segment in 2020 after it recently released AirPods Pro, known for its noise-canceling features.

Needless to say, the company has done so well in 2019 that its goal of $51 billion in services revenues is much within reach. At the same time, Apple’s incredibly strong financials on profits of more than $10 billion in each of the past four quarters make us believe that its business is still strong and its stock will only go up.

The company’s expected earnings growth rate for the current year is 10.2% versus the Computer - Mini computers industry’s projected rise of 9.8%. To top it, the Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. Apple currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Elon Musk’s Tesla a Must Buy

Even though Tesla, Inc. (TSLA - Free Report) recently revealed its much-awaited all-electric “Cybertruck,” the Model 3 designed for electric-powered performance has been a game changer. And with the company delivering 112,000 vehicles (mostly Model 3) in the fourth quarter, the company is poised to gain this year as well. The highly-anticipated launch of Model Y, a small crossover vehicle, will also boost the company this year.

Tesla’s orders, in the meantime, have been increasing steadily. Throughout last year, Tesla’s orders grew at an impressive rate. And since the federal credit for U.S.-based buyers of Tesla vehicles has been trimmed, orders will continue to rise this year as well. Additionally, demand for Model X and S has been increasing sequentially again. Tesla CFO Zach Kirkhorn confirmed that the company is “increasing production on S and X lines in response to increasing demand.”

The electric car maker currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 36.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 69.2%, way more than the Automotive - Domestic industry’s estimated rise of 7.8%.

Chip Stocks to Gain in 2020, NVIDIA to Stand Out

As investors continue to remain optimistic on the prospects of 5G wireless connectivity, demand for chips is widely anticipated to rise this year. Further, from high-end gaming, emergence of IoT to automation, demand for chips will continue to rise. Needless to say, e-sport, a multiplayer video game for professional gamers, needs thousands of semiconductor chips for production, while chips are an essential part of crypto mining as these provide the processing power needed for decoding blockchain algorithms.

Thus, the world’s biggest semiconductor companies, including Intel, AMD, Qualcomm and NVIDIA Corporation (NVDA - Free Report) will grow this year. But NVIDIA will stand out as the company continues to see immense opportunities in ray-traced gaming, rendering, high-performance computing, AI and self-driving cars.

NVIDIA currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 4.1% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 107.5% against the Semiconductor - General industry’s projected decline of 0.5%.

Blockchain to Shine and So Will Bank of America

No doubt, there has been a drop in enthusiasm over blockchain last year. After all, such technologies will never be able to live up to the media hype. But blockchain prospects have improved now, as rightly pointed out by Jonathan Emmanuel, partner at international law firm Bird & Bird.

He said that “following the completion of R&D programmes and pilots (some unsuccessful), organizations have begun to understand the specific benefits of particular blockchain platforms and the use cases that they can be appropriately deployed towards.”

And Bank of America Corporation (BAC - Free Report) can advantage from the growing popularity of blockchain technology this year. The provider of banking and financial products and services has one of the largest blockchain patent portfolios. What’s more, the company has started to fill more blockchain positions, giving us enough indication that Bank of America is a strong blockchain bet.

Bank of America currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has advanced 1.1% over the past 90 days. The company’s expected earnings growth rate over the next five years is a solid 9% compared with the Banks - Major Regional industry’s projected rise of 8.7%.

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