5 Best Tech Stocks to Buy for Momentum Investors Right Now

Our Zacks metrics have picked these winners out of a crowded field

Continuing the momentum gained in the second half of 2016, the stock market has made a remarkable run this year. In 2017 so far, the NASDAQ Composite (INDEXNASDAQ:IXIC), S&P 500 (MUTF:GSPC) and Dow Jones Industrial Average (INDEXDJX:DJI) have gained 15.4%, 7.9% and 6.7%, respectively.

Among the various sectors, technology continued to perform well, with theTechnology SPDR (NYSEARCA:XLK) registering a return of 16.6% in the year-to-date period. Notably, the ETF gained 12.9% last year.

Launched in Dec 1998, XLK is a passively managed fund designed to deliver the returns of the U.S. technology stocks. The fund, before expenses, is expected to remain on par with the returns and characteristics of the S&P Technology Select Sector Index.

The future prospects of the technology sector look promising as it is positioned to gain from the improving U.S. economy, which is highlighted by an increase in gross domestic product (up 1.2%) for first-quarter 2017, a favorable job scenario (unemployment rate down to 4.4% in April), income growth, heightened consumer confidence and momentum in the housing market.

In view of these bullish sentiments, momentum investing can be a winning strategy for those looking for high returns in a short time. This is because the strategy focuses on hot stocks that have been gaining over the past few weeks or months.

Today, we’ve zeroed-in on some tech stocks using our premium screen “Momentum Style Score.”

What’s the Momentum Style Score?

The Momentum Style Score theory states that what has been going up so far should continue to do so in the near future. This indicates the time to buy a stock that is likely to witness a rise in share price. Nothing is more frustrating than watching a fundamentally sound or inexpensive stock remain stagnant.

Momentum investors, thus, strongly believe “the trend is your friend,” which implies that stocks which are growing will continue to grow. They make short-term choices among stocks that are scaling up and sell them at the first sign of a downtrend. The basic idea is that once a trend is recognized, it is likely to retain that direction and not move against the flow.

Thus, bettling on momentum stocks might help investors earn higher returns in the short term. Nevertheless, investors should remember that this is a speculative strategy and not meant for the faint hearted.

Here’s Where to Put Your Money

Finding the right momentum stocks is not easy due to market volatility, but if executed properly, momentum stocks can bring in hefty returns.

It is here that our new Style Score System can come in handy. The Zacks Momentum Style Score indicates when the timing is right to grab a stock and make the most of its momentum. Back-tested results show that stocks with Style Scores of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), handily outperform others.

Here is the list of five best tech stocks for momentum investors right now:

Coherent, Inc. (NASDAQ:COHR) designs, manufactures and supplies electro-optical systems and medical instruments utilizing laser, precision optic and microelectronic technologies. The current fiscal earnings per share (EPS) estimate has been revised upward to $11.81 from $9.58, over the past 30 days. The EPS growth estimate is 187.3% for the current fiscal. The Zacks Rank #1 stock gained 80.9% value in the YTD period and has a Momentum Style Score of B.

Applied Materials, Inc. (NASDAQ:AMAT) develops, manufactures, markets and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry. The current fiscal EPS estimate has been revised upward to $3.00 from $2.65, over the past 30 days. The EPS growth estimate is 70.4% for the current fiscal compared with the sector average of just 6.7%. The Zacks Rank #1 (Strong Buy) stock gained 41% value in the YTD period and has a Momentum Style Score of A.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortinet Inc (NASDAQ:FTNT) is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. The current-year EPS estimate has been revised upward to 41 cents from 35 cents, over the past 30 days. The EPS growth estimate is 84.3% for the current year. The Zacks Rank #2 (Buy) stock gained 31.1% value in the YTD period and has a Momentum Style Score of B.

Microchip Technology Inc (NASDAQ:MCHP) develops and manufactures specialized semiconductor products used by its customers for a wide variety of embedded control applications. The current fiscal EPS estimate has been revised upward to $4.58 from $4.24, over the past 30 days. The EPS growth estimate is 24.9% for the current fiscal. The Zacks Rank #2 stock gained 27.4% value in the YTD period and has a Momentum Style Score of B.

ON Semiconductor Corp (NYSE:ON) is a supplier of broadband and power management integrated circuits and standard semiconductors. The current-year EPS estimate has been revised upward to $1.31 from $1.24, over the past 30 days. The EPS growth estimate is 40.7% for the current year. The Zacks Rank #2 stock gained 21.4% value in the YTD period and has a Momentum Style Score of B.

The above mentioned stocks have grabbed the spotlight with striking performances supported by solid earnings results and strong growth projections. With this in mind, we believe investing in these stocks would yield robust returns for your portfolio in the short term.

More Stock News: 8 Companies Verge on Apple-Like Run

Did you miss Apple’s 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.

A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.

Click to see them right now >>

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Fortinet, Inc. (FTNT): Free Stock Analysis Report

SPDR-TECH SELS (XLK): ETF Research Reports

Microchip Technology Incorporated (MCHP): Free Stock Analysis Report

ON Semiconductor Corporation (ON): Free Stock Analysis Report

Applied Materials, Inc. (AMAT): Free Stock Analysis Report

Coherent, Inc. (COHR): Free Stock Analysis Report

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