Many technology stocks have been skyrocketing this year due to a spike in demand for their services based on changing consumer behavior caused by the coronavirus pandemic. The NASDAQ 100 Technology Sector index, which can be seen as a benchmark indicator for the performance of the technology sector, has gained 22.7% year-to-date, versus the S&P 500’s 6.6% return over the same period.
Technology stocks are performing well due to the significant increase in remote shopping and remote working. These trends are expected to continue even after the pandemic subsides, helping technology stocks to perform well in the long run as well.
The offerings of these companies are crucial for the rapid digital transformation taking place all over the world. The businesses investing heavily in the digital transformation to move their activities online, will definitely try to reap the benefits in the long run. So, the demand for the products and services from the technology companies should continue to increase.
Alibaba Group Holding Ltd. (BABA), NVIDIA Corporation (NVDA), Salesforce.com, Inc. (CRM), and Shopify, Inc. (SHOP) have performed pretty well so far in 2020, and are expected to continue to soar in 2021 and beyond.
Alibaba Group Holding Ltd. (BABA)
BABA, frequently called the Amazon of China, is an e-commerce company. The company also provides internet infrastructure, online financial services, internet content services, and so on. BABA’s stock has gained 46% so far this year.
BABA also offers cloud computing services, which is expected to turn profitable in the next few months. Moreover, BABA has recently partnered with Zim, an Israeli shipping company, which provides logistics services to vendors who are selling on Alibaba’s e-commerce portal. BABA has also spent $3.6 billion to acquire a controlling stake in Sun Art, which is a retail chain operating in China.
BABA is expected to witness revenue growth of 51.8% in the fiscal third quarter ending December, 2020, and 38.3% in 2021. The company’s EPS is estimated to grow 25.7% in 2021 and at a rate of 3.5% per annum over the next five years.
How does BABA stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating
You can’t ask for better. The stock is also ranked #1 out of 115 stocks in the China industry.
NVIDIA Corporation (NVDA)
NVIDIA offers visual computing products and services. The company’s products are meant for gaming, high-performance computing, cloud computing, or automation. NVDA’s stock has gained 132% so far this year.
The company has recently announced the launch of Maxine, which is a video-conferencing platform that is powered by artificial intelligence. NVDA has also partnered with global pharmaceutical giant GSK in an effort to use cutting-edge computing for the process of discovering drugs and vaccines.
NVDA is expected to witness revenue growth of 42% during the fiscal fourth quarter ending January, 2021, and 44.6% in 2021. The company’s EPS is estimated to grow 57.2% in 2021 and at a rate of 17.4% per annum over the next five years.
It’s no surprise that NVDA is rated a “Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade and Industry Rank. In the 86-stock Semiconductor & Wireless Chip industry, it is ranked #15.
Salesforce.com, Inc. (CRM)
CRM’s main offering is cloud computing solutions for customer relationship management. The company operates in the sales force automation, marketing automation, community management, customer services and support, and analytics segments. CRM’s stock has gained 57.4% so far this year.
CRM has recently made several upgrades to its Work.com platform aimed at making it easier for companies to work remotely. This new update includes…
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