Tech stocks have had an amazing performance in the stock market this year. You need not look further than the S&P 500 Information Technology which focuses on the top tech stocks to watch. The tech index has been up by 70% since the market crash in March. These stocks have no doubt led to the recovery of the stock market this year. What could be the reason for this explosive growth?
You see, tech stocks have been outperforming analyst expectations time after time this year. When the pandemic reached the U.S., these stocks could rally under shifting consumer trends and adapted accordingly. For instance, tech stocks like Advanced Micro Devices (AMD Stock Report) have capitalized on the pandemic. With more people staying at home, AMD has just announced the best quarter in its history. The company also managed to release its latest-gen graphics processing unit (GPU) that has given arch-nemesis Nvidia (NVDA Stock Report) a run for its money. Nvidia previously had the largest market share for GPUs, but this could change very soon.
With the latest rally this week, the Dow has reached an all-time high of 30,000. Investors were likely encouraged by the progress of the coronavirus vaccines and news that the transition for Joe Biden has begun. Of course, tech stocks are among the constituents of the Dow Jones index, so these stocks played a huge role in the recovery of the market. Could the worst of 2020 finally be over? Retrospectively speaking, the stock market has defied all odds headstrong. Will this momentum carry forward to 2021? All things considered, here are 3 tech stocks to watch in the stock market today.
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Multinational tech corporation Autodesk (ADSK Stock Report) has had a rather impressive year in the stock market. Autodesk specializes in software products and services for the engineering and manufacturing industries. The company’s share price is up by 15% in the last 2 weeks and is currently traded at $272.84 as of Friday, November 27th’s trading session.
Fresh off its third-quarter financials on November 24, the company has announced stellar financial results. It reported a revenue of $952 million which is a 13% increase to a year earlier. These strong third-quarter results reflect the growing customer value of its cloud-based program and the resilience of its subscription business model. This makes sense as more people are working from home these days. Autodesk runs a Software as a Service (SaaS) business model, so it is able to generate revenue from designers and engineers who rely on its software.
Many industries use Autodesk’s software products. The company essentially makes software for people who make things. From a smartphone to the car you are driving, chances are it was built with the help of software from Autodesk. For the company’s fourth-quarter fiscal guidance, it expects revenue of $999 million to $1.014 billion and earnings per share of $0.53 to $0.59. With such strong growth, will you have ADSK stocks on your watchlist?Best Tech Stocks To Buy [Or Sell]: Amazon
Another top tech stock to watch would be Amazon (AMZN Stock Report). Aside from its colossal stake in the e-commerce industry, the company is also a big name in the cloud platform business. Namely, this is because it owns the biggest cloud platform in the world, Amazon Web Services (AWS). AWS serves to provide on-demand cloud computing platforms and Application Programming Interfaces (API) to clients across government and commercial sectors. How has this tech segment of Amazon’s performed?
Unsurprisingly, the company had a phenomenal third quarter this fiscal year. It reported a 56% increase in operating cash flow year-over-year. Furthermore, it also reports a 93% increase in operating income compared to a year earlier. Notably, AWS in particular saw revenue go up by 30% in the first nine months of 2020. This amounts to 13% of Amazon’s top line. This is no doubt because of its surge in operating profit of 51% year-over-year. It appears that AWS is on the heels of its Microsoft (MSFT Stock Report) equivalent Microsoft Azure. In fact, Amazon appears to be using its higher profits from AWS to supplement its other key business models. This could be an interesting time for investors to watch the company.
In recent news, Amazon announced the launch of its online pharmacy. Admittedly, this caused other drug store and drug distribution stocks to drop. The company will deliver prescriptions and these deliveries are eligible for discounts and two-day shipping under its Prime subscription service. This is an excellent move on Amazon’s end. To elaborate, this provides yet another essential service to the general public who are staying home due to coronavirus lockdowns. The company appears to be upping its momentum looking to end the year on a high. All things considered, should you consider looking at AMZN stock?Best Tech Stocks To Buy [Or Sell]: Virgin Galactic
Virgin Galactic (SPCE Stock Report) is the commercial spaceflight company within the Virgin Group. Yes, you heard that right, commercial spaceflight. The company aims to provide suborbital space flights to space tourists and suborbital launches for space science missions. SPCE stocks have been up by 53% since the start of November.
The company has just posted its third-quarter fiscal in November. Despite having a net loss of 477 million, the company has a healthy cash balance of $742 million. Virgin Galactic has also completed several key milestones. It has prepared its SpaceShipTwo vehicle for rollout and has implemented upgrades to its flight control systems. The company also has incredible assets to boast of. Its spaceflight system is equipped with spaceships, rocket motors, and motherships. Virgin Galactic is the result of accumulated intellectual property for the last 15 years.
The company is still in its infancy and is heavily focussed on the development of its spaceflight system. As soon as the coronavirus restrictions are lifted, space tourism will no doubt kick-off. Virgin Galactic hopes to fly thousands of people to space and targets 400 flights per Spaceport. The company also expects annual revenue of $1 billion per Spaceport once all systems are good to go. With such exciting development and the possibility of commercial spaceflight being a reality soon, will SPCE stock be a buy and hold for the long run?