The tech industry has been impressively resilient amid the COVID-19 pandemic, given the rising digitization across businesses and the increasing rate of technological uptake. According to Gartner, worldwide IT spending is projected to increase at a 4% CAGR to $4.40 trillion in 2022, while tech budgets in the U.S. are expected to expand by 6.7% this year, with software spending expected to be especially strong compared to other tech categories.
Rising concerns over historically high inflation currently and climbing interest rates have battered several fundamentally sound technology stocks this year. However, this provides the right opportunity to scoop up these stocks at attractive prices for future gains.
Given this backdrop, we think fundamentally sound tech stocks Autodesk, Inc. (ADSK), Infineon Technologies AG (IFNNY), and Keysight Technologies, Inc. (KEYS), which have declined more than 30% in price this year but poses solid growth potential, could be ideal bets now.
Autodesk, Inc. (ADSK)
ADSK in San Rafael, Calif., is a three-dimensional (3D) design, engineering, and entertainment software and services company with primary product offerings that include AutoCAD Civil 3D, a surveying, design, and documentation solution, BIM 360, a construction management cloud-based software, and AutoCAD LT, drafting and detailing software.
In March, ADSK launched Bridge, a data-sharing capability that gives control to construction teams to share only relevant data with project stakeholders. This new capability ensures data privacy and works efficiency by reducing the need to process manual data. This marks a significant enhancement to Autodesk Construction Cloud.
Also in March, the company announced that it had signed a definitive agreement to acquire The Wild, a cloud-connected, extended reality (XR) platform, intending to meet the technological advancements required in the field of augmented reality (AR) and virtual reality (VR) within the architecture, engineering, and construction (AEC) industry. This should prove beneficial for the company because “XR is a must-have business imperative for today and an important part of Autodesk’s Forge platform vision,” said Andrew Anagnost, CEO, and president of ADSK.
ADSK’s total net revenue increased 16.6% from the prior-year quarter to $1.21 billion in its fiscal fourth quarter, ended Jan. 31, 2022. Its gross profit for the quarter came in at $1.10 billion, reflecting a 15.8% increase year-over-year. For the fiscal year ended Jan. 31, 2022, its net cash provided by operating activities stood at $1.53 billion, up 6.5% year-over-year.
The $1.34 consensus EPS estimate for the fiscal first quarter, ended April 30, 2022, represents a 29.6% improvement year-over-year. The $1.15 billion consensus revenue estimate for the same quarter represents a 16.4% increase from the same period the prior year. It has an impressive earnings surprise history; it has topped the Street’s EPS estimates in each of the trailing four quarters.
ADSK’s shares have slumped 33.7% in price year-to-date to close the last trading session at $186.32.
ADSK’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. ADSK has an A grade in Quality. It is ranked #32 of 157 stocks in the Software – Application industry.
Beyond what is stated above, we have also rated ADSK for Momentum, Stability, Sentiment, Value, and Growth. Get all the ADSK ratings here.
Infineon Technologies AG (IFNNY)
IFNNY is a Germany-based designer, developer, and manufacturer of semiconductors and related system solutions. The company operates through four segments Automotive; Industrial Power Control; Power Management & Multimarket; and Chip Card & Security.
On May 5, IFNNY announced that it had switched the operation of its Austin, Tex., semiconductor factory to 100% renewable power, which will help the company minimize energy losses, enable higher device and application performance, and use energy more efficiently. This brings the company closer to its carbon neutrality goal for all its U.S. sites by 2022.
On April 19, Winbond Electronics Corporation, a leading global supplier of semiconductor memory solutions, and IFNNY announced the expansion of their…
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