The tech-heavy Nasdaq dropped more than 20% on Mar 23 from its mid-February peak when the coronavirus-induced selling peaked. But since then, the index has only climbed upward. The Nasdaq closed above the psychological mark of 10,000 on Jun 10 in less than 50 years, and posted its 21st record close of the year on Jun 23. It has also ended in the green for 16 of the past 18 trading sessions, its best winning streak since 1999. In the process, the index completed the V-bottom, which represents a sharp fall and then a quick recovery, resembling a V on the chart.

 

Since 1971 when the tech-heavy index began operations, whenever the index completed a V-bottom, it has averaged a gain of more than 16% in the following six-month period and a gain of more than 30% in the subsequent 12-month period, per Schaeffer’s Investment Research.

 

 

The largest tech names in terms of market capitalization have significantly contributed to Nasdaq’s stellar performance. In fact, several big tech stocks like Apple, Microsoft, Amazon and Netflix to say the least hit fresh record highs on Jun 23, squashing doubts of any impact of the coronavirus pandemic.

 

Apple’s shares moved north after the iPhone maker unveiled new operating systems for its iPhone and computers that were well received by investors, let alone customers. Apple’s move to manufacture its own chips while building new Mac computers, ditching Intel in the process, buoyed investors’ sentiments. Many high-profile analysts have begun to upgrade Apple’s price target, with many expecting Apple to benefit from momentum in the Services business, strong adoption of Apple Pay and expanding Apple Music subscriber base.

 

By the way, the coronavirus pandemic and the subsequent rise in new cases due to easing of lockdown measures will compel people to continue to work from home. And as majority of people are now remotely working, most companies need to move a bulk portion of their workloads to the cloud. This certainly puts the spotlight on Amazon as it is one of the biggest players in the cloud infrastructure market. The Seattle-based company has a solid presence throughout the Internet via Amazon Web Services (“AWS”).

 

At the same time, Microsoft’s cloud computing business has accelerated on the new normal. After all, cloud-host enterprise works solutions like Microsoft Teams product have added more than 44 million daily users across the world amid the outbreak, which is more than double of 20 million users that the company had added last November.

 

Similarly, Netflix has been able to add millions of subscribers owing to confinement of people to their homes. The provider of streaming services, in fact, has been expanding its subscriber base for a while now, mostly driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos.

 

Having said that, tech stocks have done exceedingly well in these trying times by capitalizing on government and central bank aids as well as on improving economic signals in the United States. 

 

 

Investors who have missed out on the opportunity to advantage from the uptick in technology-related stocks shouldn’t be disappointed. We have highlighted five tech behemoths that have not only come up with superb returns so far in the first half of this year but are also poised to gain through the year. These stocks possess a Zacks Rank #1 (Strong Buy) or 2 (Buy).

 

Etsy, Inc. (ETSY Quick QuoteETSY - Free Report) offers e-commerce services. It provides online and offline marketplaces to buy and sell goods. The company currently has a Zacks Rank #2. The company’s shares have soared 117.4% so far this year, while its expected earnings growth rate for the current year is 38.2%.

 

Fortinet, Inc. (FTNT Quick QuoteFTNT - Free Report) is a provider of network security appliances and Unified Threat Management (UTM) network security solutions to enterprises, service providers and government entities. The company currently has a Zacks Rank #1. The company’s shares have surged 33.8% year to date, while its expected earnings growth rate for the current year is 13.8%.

 

NVIDIA Corporation (NVDA Quick QuoteNVDA - Free Report) operates as a visual computing company. It operates in two segments, GPU and Tegra Processor. The company currently has a Zacks Rank #2. The company’s shares have risen 62% so far this year, while its expected earnings growth rate for the current year is 36.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Zoom Video Communications, Inc. (ZM Quick QuoteZM - Free Report) provides a video-first communications platform. The company currently has a Zacks Rank #1. The company’s shares have jumped 269.3% year to date, while its expected earnings growth rate for the current year is 237.1% (read more: 5 Top-Performing Tech Stocks in the First 100 Days of Coronavirus).

 

VeriSign, Inc. (VRSN Quick QuoteVRSN - Free Report) provides domain name registry services and Internet infrastructure that enable Internet navigation for various recognized domain names. The company currently has a Zacks Rank #2. The company’s shares have advanced 6.8% so far this year while its expected earnings growth rate for the current year is 24.7%.

 

 

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