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5 Large-Cap Tech Stocks to Play Nasdaq's Upward Momentum

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The Nasdaq composite gained 3.7% in the Jun 19 week following a 2.3% decline in the week ended Jun 12. Overall, the index is up almost 9.4% year to date on momentum in technology stocks that have shown greater resiliency amid coronavirus pandemic.

In fact, technology companies, particularly cloud computing, Internet services and cybersecurity providers, are expected to benefit from the ongoing work from home, web-based learning and remote health diagnosis trends, primarily due to fears of a second wave of coronavirus.

So far, the virus has infected more than $2.3 million people in the United States, with the death toll rising to 119,977, per John Hopkins university data. Globally, almost 9 million people have been infected.

Moreover, economic data, including retail sales growth in May reflecting improved consumer spending, were favorable. Additionally, the Federal Reserve’s announcement of corporate bond-buying program in order to keep credit flowing provided a shot to the tech-heavy index last week.

Prospects Galore in Tech Space

The momentum in Nasdaq will continue, primarily fueled by changing consumer preference and behavior. Stay-at-home is now the new normal as we are learning to live with the virus for a significant stretch. This is expected to boost web-based services like e-commerce, contactless payment and delivery.

Additionally, rapid adoption of cloud computing along with the ongoing infusion of AI and machine learning as well as the accelerated deployment of 5G technology, blockchain, IoT, autonomous vehicles, AR/VR and wearables are major positives.

Here we pick five Nasdaq-listed large cap tech stocks that are well-poised to grow in the current volatile market situation. Large caps have strong fundamentals that help them stay afloat in a turbulent economic and business environment. Each of the five stocks has a market cap of more than $10 billion.

Moreover, they a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Per the Zacks proprietary methodology, stocks with such a perfect mix of elements offer solid investment opportunities.

Notably, each of these stocks has outperformed the S&P 500 composite on a year-to-date basis.

Year-to-Date Performance



 



Top Bets

Zoom Video Communications (ZM - Free Report) is riding on the coronavirus-induced work-from-home and online-learning trend. Moreover, this $68.69-billion company’s efforts to eliminate the security and privacy loopholes like “zoombombing” are expected to help maintain its existing enterprise user base as well as attract more customers.

Zoom Video currently flaunts a Zacks Rank of 1 and a Growth Score of A. The Zacks Consensus Estimate for its fiscal 2021 earnings is pegged at $1.18 per share, having been raised 174.4% up in the past 60 days.

Fortinet (FTNT - Free Report) is benefiting from dominance in the Unified Threat Management (UTM) space, which is one of the fastest-evolving segments in the network security space. Moreover, this Zacks Rank #1 company is gaining from rising cyber-attack risks that are propelling demand for its FortiMail platform.

The $22.10-billion company has a Growth Score of B. The consensus mark for its 2020 earnings stands at $2.81 per share, having moved 8.1% north over the past 60 days.

Zscaler (ZS - Free Report) benefits from steady rise in demand for cloud security as the work-from-anywhere trend gains momentum due to coronavirus-led workspace disruption. Notably, this Zacks #1 Ranked company’s unique offerings include four architectural advantages that firewalls cannot add. These include Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access.

Zscaler has a Growth Score of B and market cap of $14.04 billion. The Zacks Consensus Estimate for its 2020 earnings is pegged at 17 cents per share, having been revised 13.3% upward in the past 60 days.

VeriSign (VRSN - Free Report) benefits from solid growth in .com and .net domain name registrations. An expected increase in domain name base is a positive. This Zacks #1 Ranked stock with a Growth Score of B is expected to cash in on the pervasive Internet consumption globally.

The Zacks Consensus Estimate for 2020 earnings is pegged at $6.62 per share, having been revised 11.6% upward in the past 60 days. VeriSign has a market cap of $23.72 billion.

Logitech (LOGI - Free Report) is gaining from solid performance of Gaming and Video Collaboration units amid stay-at-home guidelines due to the coronavirus outbreak. Rising adoption of new mobile platforms in both mature and emerging markets is fueling demand for this Zacks Rank #1 company’s peripherals and accessories.

This $10.25-billion company has a Growth Score of B. The consensus mark for its fiscal 2021 earnings has been revised upward by 3.7% to $2.26 per share in the past 60 days.


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