We’re coming up on 10 months into a year that has utterly upended the world as we know it and roiled the stock market.
Pharmaceutical stocks are hot, fueled by the pursuit of a novel coronavirus vaccine. Electric car stocks have posted big gains. Meanwhile, airlines and cruise lines have seen their stocks tank.
Tech seemed like a safe sector for investment — until the start of September when a broad selloff hit many tech stocks. So which stocks to buy at this point?
I still think there are some promising tech stocks here, despite the losses many have been hit with in recent weeks. Here are 7 tech stocks to buy for October opportunities:
- Apple (NASDAQ:AAPL)
- AudioCodes Ltd (NASDAQ:AUDC)
- Qualcomm (NASDAQ:QCOM)
- Cognizant Technology Solutions Corp (NASDAQ:CTSH)
- Garmin Ltd (NASDAQ:GRMN)
- Pegasystems Inc (NASDAQ:PEGA)
- SS&C Technologies Holdings, Inc (NASDAQ:SSNC)
While the September tech stock selloff may be concerning to some, there’s another way to look at it. A temporary blip and buying opportunity.
Tech Stocks to Buy For October Opportunities: Apple (AAPL)
Of course Apple gets an ‘A’ rating in Portfolio Grader. This is a technology giant, and the first U.S. company to hit a $2 trillion valuation. It topped that impressive milestone just two years after becoming the first to hit the $1 trillion level. That kind of stock performance is unheard of in a company as large and established as Apple.
Up until September 1, AAPL stock had put on another clinic, posting a gain of 79% since the start of the year. Despite a pandemic, declining smartphone sales, and a growing firestorm over the 30% cut the company takes from App Store sales.
Now trading at the $114 level, AAPL is down around 15% from that September 1 high close. That’s a discount that makes AAPL stock very tempting. Especially when you consider that the premier event on the company’s calendar, the one everyone has been waiting for — the launch of the 5G iPhone 12 — is expected within weeks.
AudioCodes is the other tech stock on this list that earns a Portfolio Grader ‘A’ rating. The company describes itself as “a leading vendor of advanced voice networking and media processing solutions for the digital workplace.”
That should get your attention. The pandemic has thrust “digital workplace” companies into the spotlight. With so many employers sending their staff to work from home, technology that enables business continuity and communication has been in high demand. AudioCodes was quick to move, offering solutions aimed at employees and contact center agents who were now working remotely.
In the first quarter, AudioCodes was named the fastest-growing enterprise SBC vendor — SBC being technology used to protect internet-based voice communications. In the second quarter, the company beat revenue estimates with an 8.13% year-over-year gain, while earnings per share of $0.32 were up over 45% YoY. All signs point to the work-from-home trend being a long lasting one, which is good news for companies like AudioCodes.
AUDC stock was hard-hit in September. It dropped from an all-time high close of $44.76 at the end of July, to $28.79 on September 4. AUDC has been slowing rising since then, but is still trading at just over $32 — a significant discount.
Apple is expecting to see a big payoff from 5G. Wedbush analyst Daniel Ives says that up to 350 million iPhones could be part of an upgrade window “super cycle.”
Great news for Apple and AAPL stock. But when it comes to stocks to buy over 5G adoption, don’t forget Qualcomm.
Qualcomm is not only the supplier of the 5G modems for the new iPhone 12, this company’s Snapdragon 5G mobile platforms also power many of the top-selling Android smartphones, as well as 5G-enabled devices like tablets and laptops.
Since settling its long legal dispute with Apple last April — becoming the iPhone’s sole modem provider for the next six years as a result — QCOM stock is up over 100%. Despite the many challenges in 2020, it’s increased in value by nearly a third this year.
5G is going to be a must-have feature in smartphones and connected devices, and QCOM stock is a solid pick to take advantage of the surge in consumer 5G adoption.
Cognizant Technology Solutions (CTSH)
Cognizant Technology Solutions barely felt the effects of the September market selloff. CTSH stock is currently trading at almost the exact same price it was on September 1 — pretty unusual for a tech stock. Then again, this Portfolio Grader ‘B-rated’ stock isn’t just any tech stock.
Ranked at number 194 on the Fortune 500, Cognizant is a multinational IT and digital services provider. It also has a specialty in medical devices.
Cognizant has long pursued a strategy of growth by aggressive acquisition, snapping up IT services and digital healthcare companies from across the globe. So far in 2020, it’s tallied six cloud-based acquisitions. The latest (announced on September 1) was 10th Magnitude, adding to Cognizant’s cloud computing presence.
Cognizant’s moves have impressed analysts, including Bank of America Merrill Lynch, which recently upgraded CTSH stock to a “buy” with a $76 price target.
Between companies having to rapidly shift to the cloud, to a focus on patients being able to monitor their conditions during a time of limited doctor and hospital access, the pandemic has played up to many of Cognizant’s strengths. That’s accelerated CTSH’s recovery since March (up 66% since March 23).
If you want a tech stock that’s positioned itself for continued growth — especially under the conditions brought by the coronavirus pandemic — CTSH is definitely one of the stocks to buy to take advantage of the situation.
Garmin is another tech company finding a silver lining amidst the coronavirus pandemic.
In its latest quarter, earnings in two segments took a big hit, contributing to an overall 9% revenue decline year-over-year. Garmin’s aviation business was down 31% YoY, while its auto business was off by 46%. That makes sense, given the challenges these two sectors have faced in 2020. They’ll recover, so don’t worry too much about these declines.
However, fitness — Garmin’s single largest segment — saw 17% revenue growth. That would be the silver lining on the pandemic cloud. After being locked down, people are getting outdoors and focusing on their health and fitness.
The global market for fitness trackers is expected to continue growing at a rapid pace, hitting nearly $92 billion by 2027. Apple and its Apple Watch owns a big chunk of that market, but Garmin is a significant player as well. In terms of smartwatch sales, Garmin is the third-largest global vendor and in the first quarter it outpaced all others (including Apple) in terms of YoY growth.
GRMN stock currently has a ‘B’ rating in my Portfolio Grader. Over the past five years GRMN shares have gained 166% in value. Despite some challenges in 2020, I expect this stock to continue to deliver long-term growth.
Massachusetts-based Pegasystems has been on a solid growth path for the past five years, and is closing in on a $10 billion valuation. The enterprise software company has seen its stock perform well in 2020 as well. Despite being hit by the meltdown in March and the tech stock selloff in early September, ‘B-rated’ PEGA stock has posted a gain of 48% so far this year.
And I think it still has upside. Pegasystems develops customer relationship and business process automation solutions. Its AI-powered “Pega Customer Decision Hub” is making waves by using artificial intelligence to increase customer engagement, helping companies to identify and target under-served customers.
This is exactly the kind of innovation companies will be looking for in tightening economic conditions. This puts PEGA in the company of stocks to buy as businesses turn to their existing customers for additional revenue.
SS&C Technologies (SSNC)
Finally, I want to look at SS&C Technologies. Another stock that earns a Portfolio Grader ‘B’ rating, SS&C is a tech company focused on the financial services market. SS&C provides services to 75 of the top 100 hedge funds in the U.S., making it a top player in the fintech market.
SSNC stock is still in the red for 2020 — but not by much. It took a steep fall in March, and another slide in September brought it just under its January 1 close level. This stock also had a tumultuous 2018 and 2019, but the long-term trajectory for this stock has been up. Since the start of 2016, that’s amounted to a gain of 112%. Given that performance, the current weakness in SSNC’s price makes it attractive.
On the date of publication, Louis Navellier had a long position in AUDC. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.