Technology stocks led the stock market rally in 2020. With remote working and virtual learning becoming the new normal, global dependence on technology has increased. Investors have realized that the industry still has a lot of room for growth. Not only large-cap tech stocks, but emerging e-commerce players also are on a high growth trajectory.
There has been an amount of speculation that the technology sector would come under pressure after Joe Biden took over as U.S. President. Data abuse, increased corporate regulation, and antitrust laws are some of the key elements on the Democratic agenda with respect to the sector. However, even given a worst-case regulatory scenario in which the tech giants’ wings are clipped, there are many other investment opportunities to be explored in this space.
At this juncture, it makes a lot of sense to pick breakout stocks that are positioned for healthy returns. Four such stocks, we believe, are Facebook, Inc. (FB – Get Rating), NVIDIA Corporation (NVDA – Get Rating), Shopify Inc. (SHOP – Get Rating), and Pinterest, Inc. (PINS – Get Rating). These stocks have all demonstrated high growth in the recent past and are positioned for spectacular gains.
FB is a social-media platform that connects people through computers, mobile devices, virtual reality headsets, and in-home devices worldwide. The company also has a photo-sharing app, Instagram and messaging app, WhatsApp. FB also offers Oculus virtual reality products, which allow people to connect and share experiences.
FB announced the launch of a News feature in the U.K. The dedicated news tab provides news based on users’ interests along with curated lists of stories. The social-media giant has partnered with Channel 4 News, Financial Times, Sky News, Daily Mail Group, DC Thomson, and Telegraph Media Group to source credible news. Lifestyle publications like GQ, Vogue and Cosmopolitan are among the other partners.
FB’s revenue for the third quarter ended September 30, 2020 surged 21.6% year-over-year to $21.5 billion on the back of strong growth in its advertising revenue. Meanwhile, its EPS climbed 27.8% over the same period last year to $2.71. The company’s daily active users (DAUs) increased nearly 12% to 1.82 billion on average. The coronavirus pandemic compelled people to depend a lot on platforms like FB to connect with others for personal or commercial reasons.
The Street estimates revenue for the quarter ended December 31, 2020 to be $26.4 billion, representing a 25.3% increase year-over-year. Meanwhile, its EPS is likely to increase 25.4% to $3.21.
FB has soared 27.6% in the past year to close yesterday’s trading session at $282.05. The stock has climbed 20.5% during the past six months.
How does FB stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
A for Industry Rank
A for Overall POWR Rating
The stock is also ranked #16 of 69 stocks in the Internet industry.
NVDA is a global leader in manufacturing graphics processing units (or GPUs) and chipsets. These are the most critical components in gaming, AI, and autonomous vehicles. The company also has processing capabilities that enable scientists and researchers to conduct high-performance applications. NVDA also manufacturers Tegra mobile processors for tablets, smartphones, entertainment systems, and automobile navigation.
NIO (NIO) announced an alliance with NVDA in which it will use NVDA’s DRIVE Orin system-on-a-chip for its next generation of electric and autonomous vehicles. NIO revealed that its NVIDIA DRIVE Orin-powered supercomputer, called Adam, will first appear in the ET7 sedan shipment in China beginning in 2022.
NVDA’s revenue for the third quarter ended October 31, 2020 was $4.7 billion, up 57% from the same period a year ago, led by a 162% growth in Data Center revenue. NVDA’s gaming revenue also
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