Markets

5 Top-Ranked Stocks at the Heart of the Latest Tech Rally

The S&P 500 Index logged its fourth consecutive week of gains and hit new all-time highs last week buoyed by regained momentum in the technology sector. The Nasdaq Composite Index scaled new record highs in recent weeks.

Mega-cap companies, especially FAANGs, led to the rally in stocks. Apple AAPL crossed the $2 trillion market cap for the first time ever. This has made the technology giant the first U.S. company to reach this level after more than doubling in five months. Tesla TSLA spiked to $2,000 per share for the first time in its history. Shares of Facebook FB, Amazon AMZN, Netflix NFLX, Alphabet GOOGL and Microsoft MSFT also rose. Notably, the information technology stocks make up more than 27% of the S&P 500 Index.

Better-than-expected earnings have added to the strength in the tech stocks. Second-quarter earnings from 91% of the sector’s total market cap in the S&P 500 Index are down 3% on 3.5% higher revenues, with 91.7% beating on earnings and 78.3% beating revenue estimates. These are bigger beat percentages from the preceding quarter.        

The solid trend is likely to continue given the global digital shift in everything ranging from remote working to entertainment and shopping. The rapid adoption of cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence, machine learning, digital communication and 5G technology will continue to drive the sector higher.

Given this, we have highlighted five stocks that led the astounding tech recovery over the past week. These stocks have a solid Zacks Rank #1 (Strong Buy) or 2 (Buy) and will continue to outperform in the weeks ahead given their superior fundamentals. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zoom Video Communications Inc. ZM – Up 17.2%

This cloud-native unified communications platform combines video, audio, phone, screen sharing and chat functionalities, and makes remote-working and collaboration easy. It saw positive earnings estimate revision of a penny over the past 7 days for this fiscal year (ending January 2021) and has an estimated earnings growth rate of 262.9%. The stock carries a Zacks Rank #1 and a Growth Score of A.

Turtle Beach Corporation HEAR – Up 14.6%

It is an audio technology company that designs audio products for consumer, commercial and healthcare markets. The stock saw no earnings estimate revision over the past week for this year but has estimated earnings decline of 19.2%. Turtle Beach carries a Zacks Rank #2 and a Growth Score of A.

Cambium Networks Corporation CMBM – Up 12.4%

This company provides wireless broadband networking infrastructure solutions for network operators, including medium-sized wireless Internet service providers, enterprises and government agencies. The stock saw no earnings estimate revision over the past week for this year and has an estimated earnings growth rate of 10.6%. It has a Zacks Rank #1 and a Growth Score of A.

Mitek Systems Inc. MITK – Up 12.2%

This company is primarily engaged in the development and sale of software products with particular focus on intelligent character recognition and offers processing technology, products and services for the document imaging markets. The stock saw no earnings estimate revision over the past week for this fiscal year (ending September 2020). It has estimated earnings growth of 38.1%. Mitek Systems has a Zacks Rank #2 and a Growth Score of A.

Zillow Group Inc. ZG – Up 11.2%

This company operates real estate brands on mobile and the web in the United States. It saw no earnings estimate revision over the past 7 days for this year. The company has estimated earnings decline of 40.7%. The stock has a Zacks Rank #2.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


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 Corporation (MSFT): Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Netflix, Inc. (NFLX): Free Stock Analysis Report
 
Tesla, Inc. (TSLA): Free Stock Analysis Report
 
Facebook, Inc. (FB): Free Stock Analysis Report
 
Alphabet Inc. (GOOGL): Free Stock Analysis Report
 
Mitek Systems, Inc. (MITK): Free Stock Analysis Report
 
Zillow Group, Inc. (ZG): Free Stock Analysis Report
 
Turtle Beach Corporation (HEAR): Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM): Free Stock Analysis Report
 
Cambium Networks Corporation (CMBM): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More