The Wall Street rally has resumed, with the northbound journey of the S&P 500 intensifying over the past week. On Tuesday, the S&P 500 hit a fresh all-time high of 5,732.93 points, after the index jumped 0.3%.
The recent S&P 500 rally is being driven by the Federal Reserve’s rate cut announcement last week, which has given tech stocks a fresh boost. Given the upbeat sentiment, it would be ideal to invest in tech stocks from the S&P 500 index such as Amphenol Corporation APH, ANSYS, Inc. ANSS, Arista Networks, Inc. ANET, Fortinet, Inc. FTNTand International Business Machines Corporation IBM.
Each of these stocks has seen positive earnings estimate revisions in the last 60 days and carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
S&P 500 Soars as Tech Stocks Rally
The Federal Reserve announced a 50-basis point rate cut last week. The majority of the market participants were expecting a quarter percentage point rate cut. However, the Federal Reserve went for a bigger cut in its bid to help the economy make a softer landing.
The broader market rally started a few days ahead of the Fed’s announcement, and gathered pace over the past week. Not only the S&P 500 but also the Dow closed at a fresh record high of 42,208.22 points on Tuesday, while the Nasdaq closed at 18,074.52.
However, the S&P 500 has had an exceptionally impressive 2024, having returned 20.2% year to date. Tech stocks have been primarily responsible for this year’s rally after a dream run in 2024. The Technology Select Sector SPDR (XLK) has gained 14.5% year to date just before the rate cut announcement. A week has since passed and the Technology Select Sector SPDR (XLK) is now up 16.2% year to date.
AI Powering the Tech Stocks' Rally
One of the key reasons factors driving the rally is the ongoing enthusiasm surrounding artificial intelligence (AI), particularly generative AI, with NVIDIA Corporation NVDA at the center of the revolution.
Experts believe that AI holds immense potential that has yet to be fully tapped. NVIDIA's remarkable successes in the past year have motivated numerous tech companies to explore AI's capabilities to achieve sustainable business advantages.
The development of smart devices plays a crucial role in this field, as they require powerful computing and learning capabilities for functions like face detection, image recognition and video analysis. These functions necessitate substantial processing power, speed, memory, energy efficiency, and advanced graphics processors, which ultimately benefit the semiconductor industry.
5 Stocks With Growth Potential
Amphenol Corporation
Amphenol Corporation designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. APH’s manufacturing facilities are generally vertically integrated operations from the initial design stage through final design and manufacturing. Amphenol’smanufacturing presence is in more than 30 countries.
AmphenolAdobe has an expected earnings growth rate of 16.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1.7% over the past 60 days. APH presently carries a Zacks Rank #2.
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ANSYS
ANSYS, Inc. develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia. ANSS’ primary focus is on creating open, adaptable solutions that let users analyze designs on-site or through the cloud.
AmphenolAdobe has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 5% over the past 60 days. ANSS currently carries a Zacks Rank #2.
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Arista Networks
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. ANET offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for the next-generation data center networks. Arista uses multiple silicon architectures across its products.
Arista Networks’ expected earnings growth rate for the current year is 18.7%. The Zacks Consensus Estimate for current-year earnings improved 3.8% over the past 60 days. ANET presently has a Zacks Rank #2.
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Fortinet
Fortinet, Inc. is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide.FTNT’s solutions are designed to integrate multiple levels of security protection, including firewall, virtual private networking, antivirus, intrusion prevention, web filtering, anti-spam and wide area network acceleration.
Fortinet’sexpected earnings growth rate for the current year is 23.3%. The Zacks Consensus Estimate for current-year earnings improved 14.2% over the past 60 days. FTNT presently sports a Zacks Rank #1.
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International Business Machines Corporation
International Business Machines Corporation has gradually evolved as a provider of cloud and data platforms.IBM is betting big on the watsonx platform, which is likely to be the core technology platform for its AI capabilities. Increased demands for Hybrid Platform & Solutions, Red Hat, Automation and Transaction Processing are tailwinds.
International Business Machines’ expected earnings growth rate for the current year is 5%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. IBM currently has a Zacks Rank #2.
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7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>International Business Machines Corporation (IBM) : Free Stock Analysis Report
Amphenol Corporation (APH) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
ANSYS, Inc. (ANSS) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : 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.
