While most tech stocks soared to unprecedented highs last year driven by investor exuberance, investors have been rotating out of tech stocks this year. This change in sentiment can be attributed to the reopening economy, which is motivating investors to seek undervalued cyclical stocks that have the potential to gain from the economic recovery at the expense of expensive tech stocks. Investors’ pessimism on tech stocks is evident in Technology Select Sector SPDR ETF’s (XLK) 6.5% gains so far this year compared to SPDR S&P 500 ETF Trust’s (SPY) 12.4% returns.
Given rising inflation, many analysts are speculating a stock market crash in the near term. Should that happen, it would be wise to scoop up the shares of quality tech stocks companies that look expensive now but might trade at a discount at that time. After all, the tech industry has the potential to rebound quickly from any slump given the increasing demand for its products and services. According to GoRemotely, the tech industry is expected to hit a $5 trillion market value by the end of 2021.
Apple Inc. (AAPL – Get Rating), Alphabet Inc. (GOOGL – Get Rating), SAP SE (SAP – Get Rating), Applied Materials, Inc. (AMAT – Get Rating), and STMicroelectronics N.V. (STM – Get Rating) are expected to gain significantly in the near- to-midterm. So, we think it would be wise to bet on them at lower prices if there is a market correction.
The iPhone maker AAPL also offers Mac, iPad, AirPods and Apple TV, to name a few of its household name products. In addition, the company offers various services, such as Apple Arcade, Apple Music and Apple News+. The verdict is still out on the AAPL versus Epic Corp.’s antitrust trial, but AAPL’s market dominance is unparalleled.
For its fiscal first quarter, ended March 27, 2021, AAPL’s total revenue increased 61.6% year-over-year to $72.70 billion. Its net income increased 110.1% from the same period last year to $23.63 billion. And its EPS came in at $1.41 for the quarter, up 120.3% year-over-year.
The company’s EPS and revenue are expected to increase 52.1% and 25.3%, respectively, year-over-year to $1.11 and $81.05 billion for the quarter ending September 30, 2021. AAPL surpassed consensus EPS estimates in each of the trailing four quarters.
On May 17, AAPL announced that Apple Music was bringing industry-leading sound quality to subscribers with the addition of Spatial Audio, with support for Dolby Atmos. This is expected to expand the company’s consumer base. The stock has gained 56.2% over the past year to close Friday’s trading session at $124.61.
AAPL’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 assess stocks by 118 different factors, each with its own weighting.
The stock has a B grade for Sentiment and Quality. Click here to access AAPL’s ratings for Stability, Momentum, Growth and Value also.
AAPL is ranked #19 of 47 stocks in the B-rated Technology-Hardware industry.
GOOGL’s Google Services segment delivers services that include Chrome, hardware, Google Maps, Google Play, Search, and YouTube, which are used by billions of people worldwide each day. Its Google Cloud segment offers infrastructure and data analytics platforms, and its Other Bets segment sells internet and TV services, among others.
The company’s sales surged 34.4% year-over-year to $55.31 billion for the first quarter, ended March 31. GOOGL’s net income was $17.93 billion for the quarter, up 162.3% from the prior-year period. And its EPS increased 166.4% year-over-year to $26.29.
Analysts expect GOOGL’s EPS and revenue to increase 90% and 46.5%, respectively, year-over-year to $19.25 and $56.11 billion for the…
Continue reading at STOCKNEWS.com