After more than a profitable run in the market during the period of spiking tech stocks back in 2017, these prominent stocks have seen a downfall in form of a batter of negative trends that arrived with the mere beginning of 2018.
Investing in Technology Sector: Reasons to Consider Owning Tech Stocks
The previous profitable run of tech stocks was led by Alphabet (GOOGL), Amazon (AMZN), Facebook (FB), Apple (APPL) and Netflix (NFLX), while the tech sector was down for a major fall with the beginning of October 2018.
Besides from Facebook’s infamous data sales scandal that most probably caused a major loss of -15% during 2018, the entire sector was affected by a case of unfavorable levels of volatility. However, this case might only mean that tech stocks can be bought as a bargain, as technology will always be in demand, especially with accelerated development of new transformational technologies.
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Top Profitable Tech Stocks to Consider Owning in 2019
Nvidia (NVDA) surprised most of investors by gaining nearly 800% in the period between 2016 and October 2018 when the tech market started to experience negative trends, when Nvidia’s gains by far were almost halved.
Nvidia’s profits might have gone down with the fall of the cryptocurrency market as the company was selling mining equipment, however, the company’s major focus is set on video games, which includes AI applications, still making it a favorable tech stock.
Workday (WDAY) on the other hand is not a famous name unlike tech giants like Google’s Alphabet, however, Wall Street watchers are predicting 25% of fiscal growth for 2019, having the company already reporting 30% of increase in sales for the past year, predicting increases in sales for 2019.
Investors who are willing to stick with tech giants such as Microsoft, can rely on the rising popularity of cloud-based software and services as Azure is preparing to take over the well-established large userbase and Microsoft users who are willing to take a switch to cloud-based Office software that is said to take over 2019.
The previous profitable run of tech stocks was led by Alphabet (GOOGL), Amazon (AMZN), Facebook (FB), Apple (APPL) and Netflix (NFLX), while the tech sector was down for a major fall with the beginning of October 2018.
Besides from Facebook’s infamous data sales scandal that most probably caused a major loss of -15% during 2018, the entire sector was affected by a case of unfavorable levels of volatility. However, this case might only mean that tech stocks can be bought as a bargain, as technology will always be in demand, especially with accelerated development of new transformational technologies.
Top Profitable Tech Stocks to Consider Owning in 2019
Nvidia (NVDA) surprised most of investors by gaining nearly 800% in the period between 2016 and October 2018 when the tech market started to experience negative trends, when Nvidia’s gains by far were almost halved.
Nvidia’s profits might have gone down with the fall of the cryptocurrency market as the company was selling mining equipment, however, the company’s major focus is set on video games, which includes AI applications, still making it a favorable tech stock.
Workday (WDAY) on the other hand is not a famous name unlike tech giants like Google’s Alphabet, however, Wall Street watchers are predicting 25% of fiscal growth for 2019, having the company already reporting 30% of increase in sales for the past year, predicting increases in sales for 2019.
Investors who are willing to stick with tech giants such as Microsoft, can rely on the rising popularity of cloud-based software and services as Azure is preparing to take over the well-established large userbase and Microsoft users who are willing to take a switch to cloud-based Office software that is said to take over 2019.
Best Tech Stocks To Buy And Watch Now!
Also investors.com advises these teck stocks:
Microsoft Stock
CEO Satya Nadella took over in 2014 and successfully moved the company’s focus from traditional software sales to a subscription-based recurring revenue model. Microsoft also has made big inroads in cloud-based services. It’s not easy for a megacap like Microsoft to pivot to new markets. But the Dow component is doing it successfully, with double-digit annual earnings growth expected in 2019 and 2020.
Microsoft continues to perform well after a breakout from a cup-with-handle base with a 108 buy point.
Composite Rating: 92 (scale of 1-99 with 99 being the best)
Latest-quarter EPS % change: +15%
Latest-quarter sales % change: +12%
Three-year annualized EPS growth rate: +18%
Annual return on equity: 35.5%
Annual pretax profit margin: 33%
ServiceNow Stock
The provider of cloud-based workflow automation software has been growing like gangbusters, even with a market capitalization of north of $40 billion. Annual earnings are expected to jump 24% in 2019 and 38% in 2020.
After a bullish gap Jan. 31 on strong earnings, ServiceNow could be poised for a test of the 10-week moving average. A bounce off the support level with conviction would put the stock in a secondary buy zone.
Composite Rating: 99 (scale of 1-99 with 99 being the best)
Latest-quarter EPS % change: +79%
Latest-quarter sales % change: +30%
Three-year annualized EPS growth rate: +82%
Annual return on equity: 55.5%
Annual pretax margin: 22.5%
PayPal Stock
Growth prospects are still bright for the leader in digital payments. The company recently took a $750 million stake in MercadoLibre (MELI), an Argentina-based e-commerce firm.
After a breakout over a 92.45 buy point, PayPal also is nearing a test of the 10-week line.
Composite Rating: 96 (scale of 1-99 with 99 being the best)
Latest-quarter EPS % change: +25%
Latest-quarter sales % change: +13%
Three-year annualized EPS growth rate: +24%
Annual return on equity: 18.6%
Annual pretax margin: 23%
Xilinx Stock
The fast-growing chip designer has seen its share of positive headlines recently. It’s in the right markets at the right time amid healthy sales of chips for data centers as well as the rollout of 5G networks. Its processors are also used in artificial-intelligence applications.
After soaring 18% during the week ended Jan. 25, Xilinx is also nearing a test of the 10-week line.
Composite Rating: 99 (scale of 1-99 with 99 being the best)
Latest-quarter EPS % change: +42%
Latest-quarter sales % change: +34%
Three-year annualized EPS growth rate: 13%
Annual return on equity: 25.3%
Annual pretax margin: 30.5%
CyberArk Stock
The strong performer in the security software group is thriving in a niche market. Hackers often aim to compromise networks by targeting management with privileged administrative access to company computer systems. CyberArk’s software monitors and manages these privileged accounts.
CyberArk is well past the 5% buy zone from the 81.98 entry point, but the stock continues to trade tightly near highs. Strength and support like this can often present an alternative entry.
Composite Rating: 99 (scale of 1-99 with 99 being the best)
Latest-quarter EPS % change: +117%
Latest-quarter sales % change: +36%
Three-year annualized EPS growth rate: 15%
Annual return on equity: 18.6%
Annual pretax margin: 27.7%
Stock Market Predictions 2019
Sources: CNBC, Barron’s, Yahoo Finance, Investopedia
What It Means for Investors: 3 Gurus’ Perspectives
“I’m optimistic. I think the fundamentals are sound,” is what Byron Wien, vice chairman of the Private Wealth Solutions unit at The Blackstone Group, told CNBC. He believes that the S&P 500 will gain 15% in 2019. One key to his prediction is his expectation that the Federal Reserve will not raise interest rates at all in 2019, contrary to the widespread view that it will announce two or three rate hikes this year.
“Inflation remains subdued and the 10-year Treasury yield stays below 3.5%. The yield curve remains positive,” Wien writes in a release by Blackstone of his “Ten Surprises for 2019,” following an annual tradition that he started in 1986, when he was chief U.S. investment strategist at Morgan Stanley. “A recession before 2021 seems unlikely,” Wien also writes, adding, “improved earnings enable equities to move higher.”
Jeremy Siegel, a professor of finance at Wharton noted for his longtime advocacy of investing in stocks, predicts an advance of 5% to 15% for the S&P 500 in 2019, per another CNBC story. He observed: “We went from a rosy view to now, ‘Oh my God, there’s going to be a recession.’ The truth will be somewhere in between, and that leaves the stock market very attractive now.”
Like Wien, Siegel does not believe that a recession is likely to begin in 2019, and he also thinks that the Fed won’t raise interest rates in 2019. On equities, he asserts that “this is a cheap market,” even if corporate earnings do not grow at all this year.
Meanwhile, Jack Bogle, noted for popularizing index funds during his tenure at Vanguard, sees “clouds on the horizon” and advises taking “a little extra caution” right now, per an interview with Barron’s. These clouds include high levels of government and corporate debt, as well as a “great upheaval” in international trade, which includes “the mystery of Brexit, which will be very disruptive to the world trade system.”
“It’s time to really be thinking how much risk you want to have,” Bogle insists. Warning that “trees don’t grow to the sky,” he thinks that automatically buying on the dips in the stock market, as many index fund investors have done in recent years, is not likely to be a winning strategy right now. On the other hand, he advises those saving for long-term goals to “Keep investing, no matter how frightened you are.”
Looking Ahead
Even those investors who share the optimism of Wien and Siegel about 2019 should heed Bogle’s warnings, and brace themselves for the inevitable setbacks. Indeed, as Bogle suggests, investors with really long-term horizons are those who are best equipped emotionally to avoid hasty, panic-driven decision making in the face of market turmoil.
