U.S. equities are hot again on Wednesday, continuing a two-week surge that has put the Dow Jones Industrial Average within striking distance of the 18,000 level for the first time since late April.
Tuesday’s solid new homes sales report, a fresh bailout for Greece and a match of M&A activity have all got the speculative juices flowing.
A hallmark of the move has been a rotation into underperformers like Big Tech stocks.
The three best-performing sectors on Tuesday (financials up 1.4%, tech up 2% and health care up 1.6%) are three of the worst-performing sectors so far this year. Yet, the sectors that have been hot this year — such as utilities, energy, materials and telecoms — underperformed.
While this is no guarantee the surge will continue, it at least shows where investors should focus as we prepare the enter the second half of 2016 — and as we await the outcome and reaction to the Federal Reserve’s June policy decision.
To prepare, here are seven Big Tech stocks worth a look.
Big Tech Stocks Leading the Charge: Microsoft Corporation (MSFT)
Microsoft (MSFT) is rising after riding its 200-day moving average for the last two months, once again challenging its 50-day moving average.
Shares have been mired in a sideways pattern since October, as excitement over new management, cloud computing and the rollout of Windows 10 gave way to the realization that new business initiatives aren’t growing fast enough to offset the decline in its traditional software-as-a-product business.
The company will next report results on July 19 after the close. Analysts are looking for earnings of 58 cents per share on revenues of $22.2 billion.
Big Tech Stocks Leading the Charge: Apple Inc. (AAPL)
Apple (AAPL) shares rose 1.5% on Tuesday and another 1.5% on Wednesday in mid-day trading, continuing a recent rally driven by hopes that the upcoming iPhone 7 launch will beat freshly lowered expectations.
Earlier in the week, there were reports that orders for components and assembly were coming in larger than Wall Street had expected ahead of the expected launch in September.
The company will next report results on July 19 after the close. Analysts are looking for earnings of $1.39 per share on revenues of $42.4 billion. Edge Pro subscribers are holding a position in the June $98 AAPL calls.
Big Tech Stocks Leading the Charge: Alphabet Inc. (GOOG, GOOGL)
Like Microsoft, Alphabet (GOOG, GOOGL) shares have been skidding sideways since October. Investors were underwhelmed by a reported earnings miss on April 21 on consensus-meeting revenues and softness in advertising.
On May 4, Axiom analysts recommended clients add to their positions on any weakness as long-term fundamentals remain attractive including growth in its YouTube business and solid projected earnings growth.
The company will next report earnings on July 21 after the close. Analysts are looking for earnings of $8.06 per share on revenues of $20.8 billion.
Big Tech Stocks Leading the Charge: Facebook Inc (FB)
Facebook (FB) shares have shrugged off some bad press surrounding allegations of censoring conservative news outlets by saying they didn’t uncover any evidence of wrongdoing, but are changing their methods anyway.
User growth and engagement remains solid as millions just can’t go a day without scrolling through their newsfeed of political rants, baby photos, humblebrags and reposted news articles.
The company will next report results on July 27 after the close. Analysts are looking for earnings of 81 cents per share on revenues of $6 billion. Technically, shares continue a nice easy rise buttressed by support near its 200-day moving average last tested in January.
Big Tech Stocks Leading the Charge: International Business Machines Corp. (IBM)
International Business Machines (IBM) shares are breaking to the upside on Wednesday, threatening to bolt out of a three-month trading range. This would reverse the selloff that started last summer that took shares from a high of $167.50 in July to a low of $115.69 in January (which was retested in February).
Shares peaked in 2013 as investors grew increasingly concerned about persistent revenue declines and increasing balance sheet leverage.
The current rebound looks technical in nature, a consequence of oversold valuations and sector rotation into areas of weakness. The company will next report results on July 18 after the market close. Analysts are looking for earnings of $2.88 per share on revenues of $20.1 billion.
Big Tech Stocks Leading the Charge: Cisco Systems, Inc. (CSCO)
Cisco Systems (CSCO) shares have broken up and over resistance from the March/April highs to challenge levels not seen since October — bumping up against a massive overhead resistance level near $29 that’s been in place since early 2015 and has been tested no less than four times now.
The company reported better-than-expected results on May 19, reporting non-GAAP earnings growth of 6% over last year on a 1.1% drop in revenue as it continues to transition away from its legacy network hardware business to focusing on supporting virtualized network environments and a subscription-based business model.
The company will next report results on August 17 after the close. Analysts are looking for earnings of 60 cents per share on revenues of $12.6 billion.
Big Tech Stocks Leading the Charge: Intel Corporation (INTC)
Chipmaker Intel Corporation (INTC) is enjoying a nice rally, with shares jumping their 50-day and 200-day moving averages over the last 48 hours. Any further upside would break the six-month downtrend that started in December and give the bulls a run at the prior high set in December 2014.
Concerns have lingered in the air over the past three years surrounding slowing PC/tablet sales as the company shifts to areas of higher growth but lower market size and smaller average selling prices, such as small processors for connected devices.
The company will next report results on July 20 after the close. Analysts are looking for earnings of 53 cents per share on revenues of $13.5 billion.