Immediate release
Chicago, Illinois-June 24, 2020-Zacks.com announced a list of selected stocks in the analysis blog. Zacks Equity Research analysts discuss the latest news and events affecting the stock and financial markets every day. The stocks featured in the blog recently include Tesla, TSLA, NVIDIA Corp., NVDA, ServiceNow Inc., NOW, Vertex Pharmaceuticals Inc. VRTX and Activision Blizzard Inc. ATVI.
Here are the highlights of Tuesday’s analyst blog:
What pandemic? Year-to-date these five large-cap stocks have risen more than 25%
The first half of 2020 will end in just one week, and Wall Street is still struggling with the coronavirus pandemic. Since the last week of May, the systematic reopening of the U.S. economy and a series of better-than-expected economic data have sparked hopes for a V-shaped recovery. However, in as many as 24 states where these governments are trying to reopen their economies, the second wave of COVID-19 has greatly weakened several analysts’ expectations of a faster-than-expected economic recovery.
Despite the current uncertainty, not all stocks have suffered losses due to the economic damage caused by the pandemic. In the first half of 2020, the behemoths of several companies have skyrocketed, and the entire market has not fully recovered from the effects of the coronavirus. It is worth noting that a few of these corporate giants have a high Zacks ranking.
Despite the impressive rebound, the market has not yet fully recovered
In the past three months, Wall Street has undergone an impressive turnaround, unless there are occasional fluctuations that will help it exit the coronavirus-led bear market. The three major stock indexes, the Dow Jones, S&P 500 and Nasdaq Composite Index, rose 42.9%, 42.3% and 51.7% respectively from the recent lows set on March 23.
However, to date, only the Nasdaq Composite Index (Nasdaq Composite) is green, which has risen 12.1% due to the outstanding performance of the technology industry. At the same time, the Dow and the S&P 500 index are still in a negative range so far. The S&P 500 index successfully turned green on June 8, but fell the next day. Currently, the Dow Jones Index and the Standard & Poor’s 500 Index have fallen 8.8% and 3.5% respectively so far this year.
Silver lining
Although the deadly coronavirus has returned in various states, a second round of lockdown is unlikely. Although the overall economy is still far below its level of activity before the lock-in, the economic data is better than expected, but it has shown basic stability.
The impressive increase in employment, the jump in retail sales and the rapid recovery of the housing market clearly show that consumer spending, which makes up nearly 68% of the US economy, is growing. In addition, the US manufacturing industry has shrunk, and its gross product accounts for about 12% of GDP. It is now gradually returning to its original level.
In addition, the US government has injected approximately US$3 trillion in fiscal stimulus measures into the economy. With the Fed’s injection of funds into the economy on June 3, its balance sheet has surged to US$7.21 trillion. Bloomberg reported on June 16 that the Trump administration is preparing a $1 trillion infrastructure project, including the construction of roads, bridges, 5G wireless networks and rural broadband.
In addition, the Fed has lowered its benchmark interest rate to the range of 0-0.25%, and may maintain it until 2022. All these stimulus measures may promote a rapid economic recovery.
Our picks
We use three selection criteria to narrow the search to five stocks. First, we chose company giants (market capitalization> 50 billion) because these companies have reliable business models and brand names.
Second, these stocks have strong growth potential for the rest of the year and have witnessed strong earnings forecast revisions in the past 30 to 60 days. Third, each of our choices has a Zacks Rank #1 (Strong Buy) or 2 (Buy).you can see Full list of current Zacks #1 ranking stocks.
Tesla CompanyIt has gained a considerable market share in the field of electric vehicles. The strong performance and impressive design of the company’s products are increasing sales. Increasing Model 3 deliveries (accounting for the major part of the automaker’s overall deliveries) are helping the company’s revenue growth. Together with Model 3, Model Y will continue to develop its prospects.
Tesla is constantly working to increase vehicle deliveries. Despite the coronavirus issue, the company’s deliveries in the first quarter of 2020 remain strong. Higher output will enable it to achieve cost and production efficiency, thereby increasing profit margins.
The company’s expected earnings growth rate this year exceeds 100%. In the past 60 days, the Zacks consensus estimate of this year’s revenue has increased by 14.8%. So far, the stock has risen 137.7%.
NVIDIA Corp.Gained a good market share among game service providers. The powerful lineup of advanced graphics cards has made it the favorite graphics card provider among PC manufacturers.
The data center provides a solid growth opportunity for the company. It is active in its attempts in autonomous vehicles and other automotive electronics fields. NVIDIA’s GPUs are quickly benefiting from the proliferation of artificial intelligence.
The company’s expected earnings growth rate for the current year (as of January 2021) is 36.4%. In the past 30 days, the Zacks consensus estimate of revenue for the year has increased by 1.4%. So far, the stock has risen 62%.
ServiceNow Inc.Provide cloud computing services that can automate digital workflows to accelerate enterprise IT operations. The company continues to win ITSM market share by replacing traditional local systems with cloud-based processes.
By launching new products and services, ServiceNow is rapidly expanding into non-ITSM markets, such as human resources and security solutions. Compared with the traditional ITSM business, the shorter sales cycle of these new products is driving revenue growth.
The company’s expected earnings growth rate this year is 27.7%. In the past 60 days, the Zacks consensus estimate of revenue for the year has increased by 7.3%. So far, the stock has risen 42.7%.
Apex Pharmaceuticals Committed to the discovery, development and commercialization of small molecule drugs for serious diseases. Its main area of focus is cystic fibrosis (CF), which has huge commercial potential. Vertex enjoys a strong position in this market and is the first company to successfully develop a drug that can treat the underlying cause of CF.
The company’s expected earnings growth rate this year is 67.2%. In the past 60 days, the Zacks consensus estimate for this year’s revenue has increased by 16.1%. So far, the stock has soared 33.9%.
Activision BlizzardDevelop and distribute content and services on video game consoles, personal computers and mobile devices. It is divided into three departments: Activision Publishing Company, Blizzard Entertainment Company and Golden Digital Entertainment Company.
The company’s expected earnings growth rate this year is 23.1%. In the past 60 days, the Zacks consensus estimate of current earnings has increased by 2.2%. So far, the stock has risen 28.1%.
These stocks are ready for a pandemic
The COVID-19 epidemic has greatly changed consumer behavior, and a few high-tech companies have stepped up their efforts to keep the United States running. Currently, investors in these companies have made a fortune. For example, while most other stocks fell, Zoom rose 108.5% in less than 4 months.
Our research shows that the demand for “stay at home” technology is growing exponentially, and there are 5 cutting-edge stocks that may soar. This may be one of the biggest buying opportunities in the past decade, especially for those who get up early.
View 5 high-tech stocks now >>
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