5 Tech Stocks That Showed Us Something Special

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tech stocks - 5 Tech Stocks That Showed Us Something Special

Source: via Nvidia

Second-quarter earnings season is nearing its end, with over 90% having already reported numbers.

tech stocks

On the surface, an accurate summary might seem like “so far, so good,” as over 70% of companies beat the analyst consensus for earnings.

Dig a little deeper, though, and we’re reminded that earnings beats never tell the full story. Far fewer companies beat on the top line, for example, suggesting a gap between organic growth and manufactured growth. Further proof comes from the fact that the S&P 500’s earnings overall declined nearly 4% for the quarter. That’s the fifth consecutive decline — a streak on par with the Great Recession.

So keeping in mind that an earnings beat doesn’t equate with impressive earnings, let’s take a look at five stocks (all in the tech sector) that did show us some strong growth.

Stellar Tech Stocks: Nvidia Corporation (NVDA)

Stellar Tech Stocks: Nvidia Corporation (NVDA)

Source: via Nvidia

Nvidia Corporation (NVDA) has been showing investors something special for some time … to the tune of a mouth-watering 170% climb over the last 12 months. The most recent thing that had Wall Street cheering this computer processor giant higher was its second-quarter earnings report.

In Nvidia’s Q2 (for fiscal 2017), sales hit record highs on the back of a 24% year-over-year expansion. That translated to strong earnings growth as well; GAAP EPS expanded by 56% year-over-year as well. For the cherry on top, Nvidia also offered investors strong guidance.

So what exactly is driving NVDA stock to such stellar outperformance? Well, the company’s technology powers video games, and is also being adopted by other booming industries — like those focused on self-driving cars, AI and big data

Stellar Tech Stocks: Facebook Inc (FB)

Stellar Tech Stocks: Facebook Inc (FB)

Since Facebook Inc (FB) first hit the public markets, investors have wanted to know about monetization, particularly on the mobile front. And in the company’s most recent quarter, that’s precisely what was delivered (again).

Overall, Facebook reported adjusted earnings of 97 cents per share, blowing away the consensus of 82 cents. That came thanks in part better-than-expected revenue: $6.44 billion vs. the expected $6.02 billion.

Ad revenue provided the largest stream for Facebook, also blowing away what Wall Street expected. Total ad revenue was $6.24 billion, while the consensus was just $5.8 billion.

And to circle back to where we started, mobile ad revenue was the biggest slice of this stream, providing 84% of the total and also topping Wall Street’s estimate.

Stellar Tech Stocks: Qualcomm, Inc. (QCOM)

Stellar Tech Stocks: Qualcomm, Inc. (QCOM)

Because Qualcomm, Inc. (QCOM) offers a substantial dividend, it’d be natural to not expect much growth from this tech stock. But in 2016 alone, shares of QCOM stock have gained around 25% — around five times the climb of the broader Nasdaq.

This optimism around QCOM was buoyed by the company’s most recent earnings report, too. Qualcomm reported both an earnings beat and earnings growth: EPS tallied $1.16 compared to a consensus of 97 cents and year-ago results of 99 cents.

For those less familiar, Qualcomm is a leading player in the semiconductor industry and boasts an impressive number of patents related to the Internet of Things — yet another highly touted tech megatrend.

Stellar Tech Stocks: eBay Inc (EBAY)

Stellar Tech Stocks: eBay Inc (EBAY)

The raw growth from eBay Inc (EBAY), which just recently spun off its payments business PayPal Holdings Inc (PYPL), admittedly wasn’t as impressive as many names on this list. In the most recent quarter, eBay’s revenue expanded by 6% while its earning barely nudged higher.

But considering so many companies aren’t posting any growth at all, that’s still a promising foundation — especially since eBay outlined a shift in focus that could pay off down the line.

More specifically, eBay highlighted its “structured data initiative.” Much like search is a huge part of the game for Facebook, eBay is working to improve the search experience on its site with the hopes it will drive more sales.

In the Q2 presentation, eBay noted its “new browsing modules” are indeed performing and converting better than those without such modules. Thus, as the initiative continues, sales should continue to grow.

Stellar Tech Stocks: Amazon.com, Inc. (AMZN)

Stellar Tech Stocks: Amazon.com, Inc. (AMZN)

Last but not least, we have the tech juggernaut of all tech juggernauts. Amazon.com, Inc. (AMZN) stock soared after earnings rose beyond Wall Street’s expectations. The company posted its fifth straight quarter of profit: an adjusted tally of $1.78 vs. the consensus of just $1.11 and last year’s tally of just 19 cents. Now, AMZN stock has booked gains of more than 40% over the last 12 months.

That growth was organic, too, with net sales expanding 31% year-over-year. And AWS, the company’s cloud service, continues to be strong. In the most recent quarter, tech giant Salesforce (CRM) selected AWS as its provider, while net sales for AWS expanded and also topped Wall Street’s consensus.

For the cherry on top, Amazon’s stellar quarter came on the heels of its best-ever day of sales (via Prime Day). Talk about special!

Hilary Kramer is the editor of GameChangersBreakout Stocks Under $10High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.


Article printed from InvestorPlace Media, https://investorplace.com/2016/08/tech-stocks-special-fb-amzn-nvda-qcom-ebay/.

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