After a horrible January on Wall Street, investors are hoping for a strong earnings period in February to save the stock market-and, especially, tech stocks. Fortunately, the profits have arrived – and now I’m seeing massive opportunity to buy a drop in tech stocks!
Forget the Federal Reserve. Forget inflation. Forget rate increases. Forget everything. Compatriots, profits drive stocks. When all is said and done, as profits go, so go stock.
Just look at the following chart. It describes the percentage change in S&P 500 over the past 30 years, including the percentage change in earnings per share of the S&P 500 over the past 30 years.
The relationship could not be stronger:
So if you want to be a good investor, you have to forget all the macroeconomic noise. Just zero-in on revenue.
Tech Stocks Data
Well, what do earnings say now? They say tech stocks are poised for a big rebound.
Almost every major tech company in every industry has reported good quarterly figures over the past two weeks, the entirety of which emphasizes that technology continues to dominate the world.
In e-commerce this quarter, tech giant Amazon (NASDAQ:AMZN) and non-cash payment facilitators Mastercard (NYSE:MA) at Visa (NYSE:V) all reported great numbers, with great guides and strong management commentary about the state of online spending.
In digital advertising, Snap (NYSE:SNAP) at Pinterest (NYSE:PIN) both reported strong quarterly numbers-despite challenges from Appleby (NASDAQ:AAPL) privacy changes-emphasizes that ad dollars continue to move rapidly in the online channel. Alphabet (NASDAQ:GOOGL) also put a lot of number, as did Digital Turbine (NASDAQ:APPS), Perion (NASDAQ:PERI) etc.
And again in enterprise software, Microsoft (NASDAQ:MSFT) reported very good growth in its cloud business. As well Service Today (NYSE:NOW), Atlassian (NASDAQ:TEAM), Doximity (NYSE:DOCS), Teradata (NYSE:TDC), at Twilio (NYSE:TWLO)-which, as of this writing, is up 30% in after-hours trading after reporting good quarterly numbers.
Clearly, enterprise spending on cloud-enabled software to drive digital changes is accelerating.
And on the hardware side of things, Apple had a record quarter for its core business on the iPhone. GoPro (NASDAQ:GPRO) broke the estimates, and so did almost all chipmakers, such as Advanced Micro Devices (NASDAQ:AMD).
Stable Acquisition of Tech Stocks
However, today’s printing of the January Consumer Price Index (CPI) brings a “twist” to this earnings-driven rally. Although we believe that unless the CPI print beats expectations, the market will take it in stride, as a number consistent with – or less than – expectations will mark the fourth consecutive months of lowering inflation pressures.
On that risk note, we would like to emphasize that despite concerns about missing money hypergrowth stocks in the current market environment, we believe that they are actually very well protected from headline risk. ito.
The fact is that while some hypergrowth stocks are losing money right now, these companies are also some of the most well-capitalized and well-funded in the world. Their liquidity risks are zero!
Compatriots, it is written on the wall. Tech companies everywhere are crushing today’s earnings estimates into a sure fire signal that the world’s technological takeover remains stable as ever.
For example, to all companies in our flagship investment research advisory Investors in Innovationthe average amount of money on balance for these companies is over $ 4 billion.
The average cash-to-market-cap ratio is 16.3%. That’s a huge number! For perspective, FAANNG stocks have an average cash-to-market-cap ratio of approximately 4%. Therefore, our company is full of money!
What’s more, most of our companies make money-about 65% currently generate positive cash flow. And in companies with negative cash flow, they have enough money in the balance that their current runway (assuming money burning rates never improve) is about 10 years!
In other words, our stocks have absolutely no liquidity risk. They are among the most funded, well -capitalized companies on the planet. And that’s because they are among the most innovative and promising businesses on the planet.
Source: Lightspring / Shutterstock
Join the rallies
These stocks – our stocks – are major long -term wins. Big money knows that, and that’s why our companies have so much of it. Big money has poured in and is now waiting for big profits over the next few years.
And we do the same.
Overall, the recent price-action has been favorable. Above all, however, huge benefits await nearby.
The chance? Well, tech stocks have been crushed towards this earnings period. And strong gains over losing stocks are leading to large rallies.
Example: Twilio stock appeared more than 30% in a few minutes last night. Snap stock rose 60% in one day last week. Teradata stock rallied more than 20% a few days ago. And Doximity stock jumped more than 20% yesterday.
We hope you have many more BIG rallies like this in the next few weeks.
Do you want to take part in these big rallies? Well, yes Investors in Innovationwe own some tech stocks that we think are positioned to climb over the next few weeks, thanks to strong earnings.
In fact, we’ve already got some big wins this revenue season. Of the four stocks mentioned above that went out more than 20% in a day, we own two of them that are heading towards profits.
Don’t be shy – find out the names of the tech stocks that could be the next big winners this season!
I’ll even tell you all about a little $ 3 “wonder stock” that I think could be one of the biggest winners in the market over the next few years.
At the date of publication, Luke Lango does not (whether directly or indirectly) any positions in the securities mentioned in this article.