After promising vaccine news from Pfizer, Inc. (PFE) and BioNTech SE (BNTX) earlier this week, popular tech stocks plummeted as investors started envisioning a decline in demand for stay at home products and services. As the virus eventually comes under control, the growth prospects for many of these companies takes a hit.
However, given the threat of a second wave hitting the United States after taking effect in European countries, the demand for these products should continue for the next few months at least. Plus, it will take some time for the vaccine to not only get FDA approval, but to be administered to the general public. So, this tech sell off is expected to be short lived.
As a surge in coronavirus cases is expected in the winter months, this will once again increase our dependence on digital platforms, boosting the performance of technology stocks in the upcoming months. Hence, buying tech stocks such as Analog Devices, Inc. (ADI), Garmin Ltd. (GRMN), and NICE Ltd. (NICE) can prove to be fruitful.
Analog Devices, Inc. (ADI)
ADI designs and markets software, integrated circuits, algorithms, and subsystems. The company offers services in the industrial, automotive, consumer, and communications sectors in the United States, Europe, and Asia, through its website and third-party distributors.
On October 22nd, ADI announced that it had partnered with NEC Corporation to provide a 5G Network Massive MIMO Antenna Radio Unit for Rakuten Mobile. With demand for 5G specific infrastructure growing rapidly, this collaboration should allow ADI to establish itself as a major supplier of 5G infrastructure ahead of the 5G boom.
ADI has recently collaborated with Microsoft Corporation (MSFT) to produce Microsoft’s 3D time-of-flight (ToF) sensor technology. As high-performance applications are in demand, this collaboration will significantly expand ADI’s industry reach and increase its revenue.
ADI’s revenue increased 11% sequentially to $1.46 billion in the third quarter that ended August 2020. Adjusted operating margin rose 150 basis points to 42.3% over this period, while cash flow from executed employee stock plans increased 39.6% year-over-year to $26,000.
The consensus EPS estimate of $1.26 for the quarter ending January 2021 indicates a 22.3% improvement year-over-year. Moreover, ADI beat the street EPS estimates in three out of trailing four quarters, which is impressive. The consensus revenue estimate of $1.41 billion for the next quarter indicates 8.3% growth year-over-year. The stock has gained 14.3% year-to-date.
How does ADI stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #3 out of 86 stocks in the Semiconductor & Wireless Chip industry.
Garmin Ltd. (GRMN)
GRMN is a designer, developer, manufacturer, marketer, and distributor of communication, navigation and information devices. The company operates globally through five segments – Auto, Aviation, Marine, Outdoor, and Fitness. It offers global positioning system receivers and aviation products independent dealers and distributors.
On October 27th, GRMN launched GPSMAP x3 chartplotter series to transform the way cruisers and sailors see above and below water. This new user-friendly feature is expected to be well perceived in the market, thereby boosting the company’s revenues significantly.
On October 22nd, GRMN introduced…
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