Tech stocks have been on a tear, with the Nasdaq finally surpassing its dot-com peak to set a new all-time high.
It’s no surprise, then, that some of the biggest tech stocks out there are also enjoying quite a run. Sure, there are a bunch of highflying biotech stocks and high-tech startups that are fueling the big returns in the Nasdaq right now, but some of the “old” names aren’t doing too bad, either.
That’s in large part because of a strong Q1 earnings season full of impressive results across the board for all manner of software stocks, gadget-makers and website operators.
The best part is that strong earnings indicate reason for investors to be optimistic going forward, too. After all, it’s one thing for stocks to go on a big run thanks to sentiment, but when the fundamentals back up that performance, then Wall Street can have confidence the run will continue.
So which tech stocks are at or near all-time highs right now — and powering higher? Here are nine to watch:
Tech Stocks to Buy: Amazon.com, Inc. (AMZN)
Amazon.com, Inc. (NASDAQ:AMZN) may still have trouble with profitability, posting another quarterly loss in its most recent report. But that hasn’t stopped AMZN stock from soaring to new all-time highs.
The reason? Amazon beat expectations handily on the revenue front — driven in large part by the strong performance of Amazon Web Services, which saw revenue jump 50% year-over-year and is on track to tally $6 billion in annual sales.
Investors are painfully aware of the fact that Amazon spends just as much as it earns in an endless pursuit of growth. But in regards to AWS, it appears that Jeff Bezos has actually gotten some real results for all that cash and has created a whole new business division for the e-commerce giant.
What’s more, the cloud-computing group isn’t just growing revenue, but also is profitable in and of itself as a unit.
Some bulls think Amazon Web Services could one day even top core retail sales, or perhaps be spun off into a separate company. But those are all long-term plans.
For the time being, the only thing investors need to know is that business is good and Wall Street is once again focused on growth instead of profitability at AMZN — bidding the stock up to new all-time highs as a result.
Tech Stocks to Buy: Apple Inc. (AAPL)
We’ll move on to Apple Inc. (NASDAQ:AAPL), which just blew the doors off yet again with another strong earnings report.
You can get the details here, but the highlights include record iPhone sales, $58 billion in revenues and $13.6 billion in profits.
Apple stock has proven its staying power, as AAPL shares are up more than 55% in the last year thanks to a continuous string of strong reports. The iPhone 6 has continued its strong momentum since its launch last fall, and the recent debut of the Apple Watch has met with much fanfare.
The question is whether the iPhone 6 can continue that strong momentum. The answer? It’s hard to tell. The shrewd move of front-loading sales by super-sizing its iPhone 6 certainly worked on consumers that enjoyed bigger phones from Samsung (OTCMKTS:SSNLF) and Microsoft Corporation (NASDAQ:MSFT), as well as others using Google Inc (NASDAQ:GOOG, NASDAQ:GOOGL) Android. But that can’t last forever.
Still, AAPL is now sitting on nearly $200 billion in cash and investments, and it’s trading at a pretty reasonable forward price-to-earnings ratio of less than 18 despite its hot run.
Throw in strong sentiment as Wall Street continues to be enamored by all things Apple, the massive amount of cash going toward dividends and buybacks, and the recent placement of AAPL stock in the vaunted Dow Jones Industrial Average, and clearly there’s plenty to like.
This might be a profit-taking opportunity for swing traders, but longer-term investors shouldn’t be afraid to buy here.
Tech Stocks to Buy: Netflix, Inc. (NFLX)
Netflix, Inc. (NASDAQ:NFLX) gapped up almost 25% after the streaming video giant reported strong Q1 earnings. The reaction surprised some, since NFLX stock actually missed its profit forecast and saw EPS decline year-over-year.
However, the $1.57 billion in revenue that Netflix racked up — up 24% from $1.27 billion a year ago on strong international growth — was very impressive, and a validation of the company’s long-term growth plans overseas. Furthermore, the pesky headwinds created by a strong dollar bred lots of earnings trouble, and NFLX stock would have had much better results if not for the foreign exchange losses.
As I noted recently in a bullish article on Netflix, short interest has fallen as the bears have abandoned this trade, so the big move wasn’t just a short squeeze. Furthermore, the global growth we’ve seen continues to drive revenue; While the international operations of Netflix aren’t profitable quite yet, once the cost of new customer acquisition fades and those annual renewals continue, margins should improve nicely in the months and years ahead.
And then there’s always the hope of a big buyout premium as media companies continue to consolidate and hunker down in the age of “cord cutters” who shun traditional cable TV. What with the death of the Comcast Corporation (NASDAQ:CMCSA) and Time Warner Cable Inc (NYSE:TWC) merger, you can bet some big moves will be coming again in the near future — and NFLX stock could be a juicy acquisition target.
Tech Stocks to Buy: LinkedIn Corp (LNKD)
LinkedIn Corp (NYSE:LNKD), unlike some of the other names on this list, has actually been hovering around new all-time highs since around February after a big earnings beat in the previous quarter’s results. That bodes very well for the performance of LNKD stock this time around as it reports earnings again later this week.
The biggest reason to like LinkedIn stock, as InvestorPlace Assistant editor John Divine pointed out a few months ago, is the ever-improving labor market that leads to more job seekers updating their profiles and more recruiters posting job ads for a fee on LinkedIn.
As the ultimate cyclical stock, increased hiring means increased business for LinkedIn — so it’s no surprise that as the unemployment rate has steadily dropped from a peak of about 10% to 5.5% currently, more people have been using the networking tool.
It also helps that the company is still in big-time growth mode, with revenue expected to jump by over 30% both this year and in fiscal 2016 as well.
When you marry a rapidly expanding tech stock that happens to focus on a business model that has a big macro tailwind, it all adds up to success — and that’s why LNKD is hovering around its all-time high and could push even higher in 2015.
Tech Stocks to Buy: Facebook (FB)
Facebook Inc (NASDAQ:FB) has been a perpetual target among the bears who think that the social media giant has its best growth behind it and is destined to hit headwinds because of critical mass.
Well, once again, FB stock proved the naysayers wrong with strong first-quarter results last week.
Despite falling just short of expectations on earnings, the details showed the miss was largely due to big spending on new products as expenses jumped 83% year-over-year. And on top of that, revenue was up 42% thanks to continued dominance in mobile. According to earnings, mobile now adds up to 73% of total revenue — proving that FB stock has deftly made the transition from its desktop model to a mobile one, and at the same time has been able to increase its margins and monetization.
Looking forward, Facebook continues to grow ambitiously overseas as well as increasing its revenue per user metric steadily over the long-term. That means those expecting Mark Zuckerberg and FB stock to hit a wall might be holding their breath for some time.
Digital marketers continue to transition their ad spending over to Facebook as software and tracking becomes more sophisticated, allowing efforts to target very specific groups — making marketing campaigns effective and focused so you’re not wasting money.
Facebook is the gold standard of digital advertising right now, and its performance shows this. Investors should have confidence buying this tech powerhouse even near all-time highs.
Tech Stocks to Buy: Expedia Inc (EXPE)
Expedia Inc (NASDAQ:EXPE) is up 16% so far in 2015, hovering at yet another all-time high as the online travel portal continues to connect with consumers at home and abroad.
Yes, EXPE stock did miss expectations in its Q4 report back in February and saw a 7% slide in EPS year-over-year, resulting in a brief downtick for the stock.
But the biggest headwind facing Expedia is currency-related, as a strong dollar weighs on revenue overseas in its fast-growing international business. Since Expedia is headquartered in the U.S., it has to convert foreign revenue into dollars, which naturally deflates numbers when other currencies are weak vs. the greenback.
And after Wall Street adjusted expectations to forex troubles, EXPE stock rebounded sharply and has been on quite a run since then. Furthermore, after Expedia announced in January that it was acquiring Travelocity from Sabre Corp. (NASDAQ:SABR) for $280 million in cash, there has been even more optimism about how the company will continue to grow market share and influence in the year ahead.
On top of all this, it’s important to note that the global economy continues to slowly improve and growth rates in the developed world are again supporting stronger consumer spending and business travel. Those factors mean that more people will take to the air in 2015, and EXPE will continue to benefit from this trend.
Tech Stocks to Buy: NetEase, Inc (ADR) (NTES)
NetEase, Inc (ADR) (NASDAQ:NTES) is an Internet powerhouse in China, focused mainly on a popular web portal 163.com as well as advertising and gaming platforms. The web portal is nice, but perhaps the biggest potential for NTES comes from its online video gaming and online lottery businesses.
NetEase continues to grow and thrive as the Internet, censored as it is, keeps growing and evolving in China. But it is also considering a push into the West for growth, as evidenced by NTES establishing a North American headquarters this year.
NetEase already has good relationships with U.S. video game players, as evidenced by its licensing agreement with Activision Blizzard, Inc. (NASDAQ:ATVI) to run its World of Warcraft business in China, and this could become a two-way street in the future.
NTES stock is riding high after strong Q4 earnings in February that showed better-than-expected earnings and revenue, driven by its e-commerce and advertising businesses. We could see a similar beat this time around when NetEase reports earnings in May.
If you’re looking to play the momentum in Chinese stocks right now but you’re afraid of an unproven or risky name, consider Netease. The stock has a market cap of more than $16 billion and is one of the most established players in the Chinese Internet space — which not only gives it stability, but also big growth potential as both businesses and consumers in China continue to increase their reliance on the Web.
Tech Stocks to Buy: eBay Inc (EBAY)
EBay Inc (NASDAQ:EBAY) is flirting with its highest levels ever, up more than 10% in the past year to rival its previous highs around $60 per share seen back in 2004.
But unlike the good old days of this dot-com darling, the strength of EBAY stock right now is coming from its exposure to mobile payments with is fast-growing PayPal business — and more particularly, the optimism about a spinoff of this arm that could unlock big value for shareholders.
EBay just reported decent earnings, topping on both the top line and the bottom line despite the currency headwinds created by a strong dollar. Shares rose as a result, but the big story remains the efforts to split the business of PayPal from the legacy e-commerce arm of eBay. PayPal added another 3.6 million new users to tally 165 million in total, with the service processing more than 1 billion transactions on the quarter.
PayPal is the front-runner in the age of mobile payments, and there’s a lot for investors to be excited about here. But the core retail business of eBay is no slouch either, with decent performance and pretty modest expectations given all the mobile payments hype.
Consider buying EBAY stock, then, even as it bumps against all-time highs and investors wait for the inevitable spinoff to happen in the near future.
Both eBay stock and the new PayPal stock post-spinoff could be worth owning.
Tech Stocks to Buy: Electronic Arts Inc. (EA)
Electronic Arts Inc. (NASDAQ:EA) is the only stock on this list that hasn’t quite reached all-time highs — yet.
EA stock traded in the $68 area back in 2005. However, while it’s south of $60 right now, it’s still blazing a quick path to those mid-aught highs.
That’s because EA went on quite a tear in 2014, with shares more than doubling to make this pick the second-best performer in the entire S&P 500 for the year. It has followed that up with another 25% in returns this year, and shares currently sit back at pre-recession levels.
The biggest catalyst was strong Q4 numbers reported in February, where EA revenue and profits handily beat expectations thanks to the next generation of video game consoles driving up demand for new titles. Continued success is likely in 2015 thanks to a strong lineup of games with great consumer appeal, including the Madden line of football games and EA’s Battlefield franchise.
On top of that, EA continues to forge ahead in mobile game development with some $600 million in revenue from apps and smartphone-based titles right now, which is growing all the time. An added plus is that mobile games tend to be more pared down because of the comparatively short gameplay time and smaller screens, meaning fewer developers and lower costs.
Sure, smartphone gamers can be fickle, and it’s crucial for EA to continue to innovate and connect with consumers to succeed in the years ahead. But given the strong pedigree of Electronic Arts programmers, great brand appeal and the potential for big margins in mobile, investors can have confidence in EA stock across this year and into 2016 even as it trades near new all-time highs.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at email@example.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not hold a position in any of the aforementioned securities.
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