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5 Tech Stocks Winners in 2015 Poised for Continued Growth in the New Year

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As many investors know, 2015 was an unfortunate year for stocks overall, as major markets are set to have their worst performance in several years. Despite this poor performance, there were some bright spots in certain sectors, and some stocks still greatly outgained the overall markets. Several of these "winners" in 2015 happen to be technology stocks, and with great showing in 2015, it is extremely possible that the following stocks will be able to produce solid gains again in the coming year.

Below are 5 stocks that produced substantial positive gains in 2015, and are poised to continue that momentum into the fast approaching New Year.

Facebook Inc FB

The first of these 2015 winners is Facebook, which saw its stock gain +33.4% year-to-date. FB is currently a Zacks Rank #2 (Buy), and the company could have another memorable year in 2016.

A new partnership with ride-hailing company Ube r, which has the service available through Facebook Messenger, is just another step FB has taken to diversify itself and its abilities. Furthermore, Facebook announced in its most recent earnings report that more than 8 billion video views occur on a daily basis, which is more than the last reported number provided by YouTube.

FB user growth also grew 12.6% year-over-year in its most recent quarter, and the company-owned Instagram topped 400 million users this past September, a number continues to grow. Another company acquisition, Oculus Rift, resides in the virtual reality market that was recently projected by recode.net to grow to $70 billion by 2020. Though Oculus Rift is far from scratching the surface of its potential, it could begin to produce FB investor benefits in 2016, especially as FB begins to ramp up its marketing efforts for the VR platform.

Alphabet Inc (GOOGL)

Technology giant Alphabet, the company formerly known as Google, also had an extremely strong year in 2015, as the company's stock is up around 43% year-to-date. Though a Zacks Rank #3 (Hold), the company owns a B for its Growth Style Score from Zacks. In addition to an impressive stock price gain, GOOGL was also able to produce EPS growth of 34.82% in 2015.

The future continues to look bright for Alphabet heading into 2016; the company has standout assets like Google Search, Android, Chrome, and YouTube, each of which has over 1 billion users. The company continues to be aggressive with implementing new monetization systems to improve revenue growth. For example, Alphabet recently introduced install ads where the company gets a fee when a user downloads an app as well as the creation of new ad formats. YouTube Red, a $9.99 per month premium service, currently only available in the U.S., is supposed to be rolled out globally over the course of 2016.

Adobe Systems Inc (ADBE)

Adobe Systems is a provider of graphic design, publishing, and imaging software for Web and print production. The company offers top-tier products for major growth areas like its Creative Cloud, which includes apps like Photoshop, Illustrator, Premiere Pro, and various other apps. It also has a marketing cloud that helps companies improve results on platforms like Alphabet, Facebook, and Twitter TWTR .

ADBE has seen its stock rise 25.6% over the course of 2015, and it is extremely possible that that momentum will carry into 2016. The company certainly believes so, as during its latest analyst meeting, ADBE presented a bullish case for long-term growth, forecasting annual earnings growth of 30% on average as well as revenue growth of 20% until fiscal 2018.

Over the past few years, Adobe has made bold moves to the cloud that have yielded strong results, and investors could be enjoying more good times ahead as the company continues to improve itself. While currently holding a Zacks Rank #3 (Hold) and a B for its Zacks Growth Style Score from Zacks, investors could see these statistics change for Adobe in the near future.

Microsoft Inc (MSFT)

2015 proved to be a good year for another tech giant, Microsoft, as the company's stock has gained nearly 20% year-to-date. Microsoft, like Adobe, has moved a great deal of its focus toward the cloud, and it is paying off. Just in its most recent quarter, Microsoft reported that cloud sales rose 8.8% to $5.9 billion.

While 2015 was solid for the Surface Pro-maker, it appears that 2016 could be just as fruitful, if not more so. The company has seen growth that is likely to accelerate in 2016, and the market is quickly catching on. Microsoft is expected to deliver EPS growth of 13.6% in 2016, which will be a 6.6% increase in revenue. Though those numbers may not seem incredibly high, one must keep in mind that growth numbers like that are very solid for an old-line mega cap tech firm that does more than $90 billion in annual sales.

As cloud sales continue to accelerate, Microsoft will likely continue to be a solid stock pick. The company is currently a Zacks Rank #3 (Hold), though it does also have an A for its Growth Style Score. Another factor that bodes well for the company moving forward is a slower than expected decline in its biggest segment that includes Windows, Xbox, and Surface Tablets. It should also be noted that the results from Windows 10 are expected to make up for those losses felt in Microsoft's other segment, and together with cloud services, the company is capable of producing more growth and earnings beats in the coming year.

Cognizant Technology Solutions (CTSH)

With a year-to-date return of 25%, 2015 was a very successful year for one of the top providers of IT, consulting, and business process outsourcing services: Cognizant Technology Solutions. The company has been able to outpace several peers in the past couple of years on greater exposure to the fast-growing industries like financial services and healthcare, and investors have felt the positive results.

CTSH posted substantial revenue growth of 20.75% in 2015 to go along with EPS growth of 10.91%. In regards to 2016, the company seems poised to continue to deliver solid results, as EPS growth is projected to be around 13.22%; Cognizant Technology is expected to benefit from the strong demand for its high-quality, low-cost technology services. CTSH also is currently a Zacks Rank #3 (Hold), but it holds a great Growth Style Score of an A.

Looking Ahead

As mentioned earlier, and as all investors know, 2015 will be a forgettable year in the stock market. Even in years of decline, the market will almost always have outperformers, and 2015 was no different. The technology sector produced several companies that were able to outperform the broader market, and the companies listed above were part of that group.

What sets these tech stocks apart, though, is that despite solid performances in 2015, each one is capable of producing solid gains in 2016. As the year comes to a close, many investors will reassess their holdings, and with these companies likely enjoying continued success next year, each one should be considered as a potential investment.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MICROSOFT CORP (MSFT): Free Stock Analysis Report

COGNIZANT TECH (CTSH): Free Stock Analysis Report

ADOBE SYSTEMS (ADBE): Free Stock Analysis Report

FACEBOOK INC-A (FB): Free Stock Analysis Report

TWITTER INC (TWTR): Free Stock Analysis Report

ALPHABET INC-A (GOOGL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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