Tech stocks have been on fire for most of 2020.
It’s why the Nasdaq soared from a March 2020 low of 6,631 to nearly 11,370. With sizable momentum, tech stocks could easily take the index to 12,000 by year end. Driving a good deal of upside is actually the novel coronavirus pandemic, which has “exacerbated the importance of their services to the broader economy,” says Fortune contributor Rey Mashayekhi.
Related tech exchange-traded funds have been just as explosive.
- Technology Select Sector SPDR Fund (NYSE:XLK) ran from $70 to $119
- iShares U.S. Technology ETF (NYSE:IYW) ran from $180 to $307
- Vanguard Information Technology ETF (NYSE:VGT) ran from $180 to $317
“I believe that [large-cap tech stocks] will continue to lead the market higher, because that’s where the cash flow is in this work-at-home and shop-at-home economy,” according to Marc Chaikin, founder of Chaikin Analytics.
The best part – the tech stock boom is far from over.
Stocks across the tech industry outperformed the markets by wide margin, and that’s not likely to end any time soon. Granted, many tech stocks are a bit frothy, but the run is far from over.
In fact, here are three of the top tech stocks you may want to consider immediately.
Top Tech Stocks: Apple (AAPL)
With a market cap of $2.15 trillion, Apple just became the most valuable company in the world. What makes Apple even more attractive is its 4:1 stock split later this month. Once it splits, and prices land at just over $125 a share, I strongly believe the AAPL stock could run back above $500 in a hurry – and split again.
“Apple’s $2 trillion valuation represents about 10 percent of GDP for the U.S. and about 7 percent of the S&P 500,” said David Kass, professor of finance at the University of Maryland’s Robert H. Smith School of Business. “Its iPhone is ubiquitous. It has transformed the way we live. Its ecosystem is self-sustaining.”
Better, Apple just blew earnings out of the water.
EPS came in at $2.58, which beat expectations. Revenue of $59.69 billion beat expectations of $52.25 billion. iPhone revenue soared to $26.42 billion, which was well above estimates for $22.37 billion.
Even better, Wedbush analyst Dan Ives believes Apple has another 27% of upside here.
“Apple has a ‘once in a decade’ opportunity over the next 12 to 18 months as we estimate roughly 350 million of Cupertino’s 950 million iPhones worldwide are in the window of an upgrade opportunity.”
Advanced Micro Devices (AMD)
The first time I wrote about Advanced Micro Devices, I said the tech stock could maintain its momentum and stay hot, adding that for “long-term buy-and-hold investors AMD stock does appear attractive at current prices.”
At the time, the AMD stock traded at just $28.90. It’s now up to $83.60 and exploding. From here, I still believe it could hit $100 a share before the year is out with several catalysts. For one, it’s chips will be used in the new gaming consoles from Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT) later this year.
Two, it continues to steal market share from Intel (NASDAQ:INTC) as it releases new chips to the market. Three, AMD just said anticipated chips are still on schedule, including the 7nm processors that are based on Zen 3 architecture, and its RDNA 2 graphic cards.
And four, with many people working and schooling from home, the company is seeing bigger demand for data center chips, and even for its cloud-computing services. AMD stock is also climbing on a new bullish note from Cowen analyst Matthew Ramsay, who just increased his price target on the AMD stock to $100.
“Accelerated by the move onto the 7nm TSMC process in 2019 against Intel’s delayed 10nm silicon, we believe consistent product execution across the PC, GPU, and server roadmaps can deliver upside to the much higher gross margin targets (40-44% versus 37% today) and material upside,” he said.
Fastly Inc. (FSLY)
Cloud computing stock Fastly has been explosive for most of the year. Since bottoming out in March 2020, the FSLY stock ran from a low of $10.63 to a high of $117.79. After pulling back slightly to $85, I believe the stock could challenge its recent highs again soon.
All thanks to an increase in internet traffic that’s driving business for infrastructure providers.
Better, according to CEO Joshua Bixby:
“The value of our platform to our customers continues to show in our results. Fastly delivered another quarter of solid execution. We achieved strong top-line revenue growth, won new customers, expanded enterprise spend, delivered operating leverage, and bolstered our balance sheet. Despite the current economic uncertainty, we remain optimistic about the demand for our mission-critical services and the underlying growth of our business for the remainder of 2020 and years to come.”
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.
