Apple AAPL, Amazon AMZN, and Facebook FB all impressed Wall Street after the closing bell on Thursday. These results helped further showcase big-tech’s coronavirus immunity and why investors who were hesitant to jump on the bandwagon, given the massive climb, might want to dive into some stocks now.
The iPhone maker’s revenue and earnings topped estimates and it announced a 4-for-1 stock split. Meanwhile, Amazon’s sales surged 40% to $88.9 billion, boosted by the coronavirus stay-at-home push. And Facebook’s sales popped 11%, with both daily and monthly active users up 12%.
It’s worth noting that Google parent Alphabet’s GOOGL sales dipped 2%, as the coronavirus caused advertisers to pull back. But its long-term outlook remains strong.
PayPal PYPL and Qualcomm QCOM both also surged on Thursday, as big-tech continues to stand in stark contrast to the broader, pandemic-torn economy, with U.S. second quarter GDP down 33% on an annualized basis.
The ability to grow during these conditions highlights why investors likely need to add more exposure to tech, as the coronavirus could be with us for some time. With this in mind, let’s dive into three tech stocks that have soared recently and look ready for more growth…
Zoom Video ZM
Zoom was the first real star coronavirus stock, as its cloud-based video conferencing offerings surged in popularity as people began to work from home. Some might fear that Zoom chats with friends will fade, and this is true. But that doesn’t really matter since ZM makes its money from paying business customers, who were using its offerings more regularly even before the pandemic. And the remote-work environment could be here for a long time.
On top of that, firms that find work-from-home relativity seamless might permanently cut back on rent and commercial real estate expenses. That said, the cloud-based video firm crushed our Q1 earnings estimate by 100% in early June, while its revenue jumped 169%. Perhaps more importantly, ZM closed the period ended on April 30, with roughly 265,400 customers with more than 10 employees, up 354% from the year-ago period. And customers contributing more than $100,000 in trailing 12-month sales climbed 90% to 769.
Zoom’s Q2 revenue is projected to climb 241%, with its full-year sales set to surge 189%, based on our current Zacks estimates. And the bottom-end appears even more impressive, with ZM’s adjusted Q2 earnings projected to soar 462% to $0.45 a share, with FY21 expected to skyrocket 260%.
Zoom is a Zacks Rank #1 (Strong Buy) at the moment that also sports an “A” grade for Growth and a “B” for Momentum in our Style Scores system. ZM shares are up 265% in 2020, but they have cooled off recently, which could give them room to break out when it reports its next quarterly results.
Shopify SHOP
Shopify helps businesses build, maintain, and grow their e-commerce presence. SHOP makes money from recurring subscription fees and add-ons such as payment processing. SHOP has also continued to partner with influential players within tech and retail, including Facebook and Walmart WMT. The Canadian company’s offerings are highly attractive in an age where retailers need to expand their digital reach and its sales growth proved as much—soaring 73%, 59%, and 47% in the last three years alone.
Then the coronavirus hit and forced businesses everywhere to dive headfirst into online sales. SHOP stock is up 220% since mid-March and it hit a new high after it posted its Q2 results on July 29. The company’s second quarter revenue soared 97%, with gross merchandise volume up 119%. And new stores created on the Shopify platform climbed 71% in Q2 compared with Q1 2020.
Shopify is a Zacks Rank #1 (Strong Buy) right now that combines both e-commerce and fintech, which both offer strong long-term growth potential. Investors should also note that e-commerce sales accounted for only 12% of total U.S. retail sales in the first quarter. So clearly there is a huge addressable market still out there. The company’s FY20 revenue is currently projected to jump 40%, with its adjusted earnings expected to climb 90%. And these figures could climb as analysts update their outlooks.
Advanced Micro Devices AMD
AMD’s processors are used within the PC market and its expansion into gaming and data centers provides far more room for expansion. The company’s offerings now compete against the likes of Nvidia NVDA and its CPUs are starting to look much better compared to rival Intel INTC. In fact, the announcement of its new 7nm Ryzen desktop processors on July 21 helped send its stock to new highs. And then the firm wowed Wall Street with strong Q2 results on July 28.
AMD’s Q2 revenue jumped 26% and it raised its guidance, which is no easy task given the current economic environment. The company expects to benefit from the holiday 2020 launches of the and next-generation Xbox and PlayStation and its cloud-focused chips are being used by Microsoft MSFT and others. “We delivered strong second quarter results, led by record notebook and server processor sales as Ryzen and EPYC revenue more than doubled from a year ago,” CEO said in prepared remarks.
AMD’s fiscal 2020 sales are expected to surge 32%, based on our current Zacks estimates. This would top FY19’s 4% jump and come in above FY18’s 23% and FY17’s 22%. AMD is then expected to follow up this growth with another 17% climb in FY21. Plus, its adjusted FY20 earnings are projected to jump 60% and then pop 46% higher in 2021. AMD is a Zacks Rank #3 (Hold) at the moment that has seen its shares soar 50% in the last month and 450% in the last three years.
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