The digital transformation by businesses during the COVID-19 pandemic powered the tech sector to a rocket-like rally last year. This is evidenced by iShares Global Tech ETF’s (IXN) 41.8% returns in 2020. However, the economic recovery this year has motivated investors to bail out of expensive tech stocks in favor of potential post-pandemic winners. This has resulted in a selloff of tech stocks.
However, the adoption of hybrid working models by many companies during the pandemic, combined with huge demand for cloud services, cybersecurity and connected devices and sensors, and rising interest and investments in the 5G technology and artificial intelligence (AI), make analysts predict the global information technology market will hit $11.87 trillion by 2025, representing a 9% CAGR.
Given this outlook, we believe Intel Corporation (INTC – Get Rating), International Business Machines Corporation (IBM – Get Rating), Panasonic Corporation (PCRFY – Get Rating), and Canon, Inc. (CAJ – Get Rating) are well positioned to deliver solid returns in the coming months.
INTC designs, manufactures, and sells computer products and technologies. The company operates through six segments—Data Center Group, Internet of Things (IoT), Non-Volatile Memory Solutions Group, Programmable Solutions Group, Client Computing Group and All Other. It serves original equipment manufacturers, original design manufacturers, and cloud service providers.
In an announcement dated May 3, INTC revealed that it will invest $3.50 billion in the Rio Rancho campus to equip its New Mexico operations for manufacturing advanced semiconductor packaging technologies, including Foveros, INTC’s breakthrough 3D packaging technology. With innovative economic development tools and global demand for this technology, INTC hopes to create high-paying and high-quality jobs in Mexico.
Beyond accelerated memory scanning capabilities, Microsoft Corporation (MSFT) has collaborated with INTC to expand the use of Intel Threat Detection Technology in Microsoft Defender for Endpoint, to activate central processing unit (CPU) based cryptomining machine learning (ML) detection. This further accelerates end-point detection and protection from cryptojacking malware.
During its fiscal year 2021 first quarter, ended March 27, 2021, INTC’s non-GAAP operating margin was 32.8%, which represented a 130-basis-point rise sequentially. The company’s revenue from its IoT segment increased 13.5% year-over-year to $1.29 billion. And its revenue from its Client Computing Group increased 8.5% year-over-year to $10.61 billion.
Analysts expect the stock’s EPS to grow at 5.4% per annum over the next five years. INTC stock has climbed 24.5% over the past six months to close yesterday’s trading session at $56.85. Over the past nine months, the stock has gained 16.2%.
INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value, and a B grade for Sentiment and Quality. We have also graded INTC for Growth, Stability and Momentum. Click here to access all INTC’s ratings.
INTC is ranked #9 of 98 stocks in the B-rated Semiconductor & Wireless Chip industry.
IBM provides integrated solutions and services worldwide. The company operates through six segments—Cloud & Cognitive Software, Global Business Services, Global Technology Services, Systems, Global Financing and Other. It offers application, technology consulting and support, process design and operations, cloud, digital workplace, and network services, as well as business resiliency, strategy, and design solutions.
On May 5, the company introduced a new Software as a Service (SaaS) version of IBM Cloud Pak for Security that is designed to simplify how organizations deploy a zero-trust architecture across the enterprise. It also announced an alliance partnership with leading cloud and network security provider, Zscaler, and new blueprints for building a security program designed by applying the core principles of zero trust.
In late April, IBM agreed to…
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