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5 Technology Stocks Poised to Beat Earnings Estimates in Q2
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The technology sector had a terrific second-quarter 2021 driven by coronavirus-led digitalization as well as changing consumer preference and behavior.
Rapid adoption of cloud computing and the integration of AI and machine learning have been key catalysts. This is expected to drive second-quarter 2021 results for players in the sector.
Technology stocks are riding on continuing work-from-home and online learning wave that have kept demand for remote-working tech, including advanced technology-based virtual meetings and conference tools, cloud services and cybersecurity solutions, high in the to-be-reported quarter.
The work-and-learn-from-home necessity has propelled demand for PCs, notebooks, peripheral accessories and cloud storage. All of these, in turn, are fueling growth for high-speed Internet services.
Although PC shipments have shown signs of slowing down in the second quarter, demand for notebooks has been noteworthy. Per IDC data, PC shipments in second-quarter 2021 improved 13.2% year over year to 83.6 million units.
Moreover, short supply of chips is opening up opportunities for semiconductor companies. Notably, the U.S. Senate has passed a bill that allocates $52 billion for the American semiconductor industry in an attempt to bolster chip manufacturing as well as improve competitive prowess against China.
Also, contactless payment and delivery have gained significant traction during the outbreak. Further, an e-commerce boom prompted by changing consumer behavior is expected to have benefited top-line growth.
However, higher inflation has been a bother for the technology sector last quarter. Higher inflation means increased borrowing costs as well as input costs. As majority of technology companies rely on borrowing to expand their businesses, a higher inflation rate has been damaging to their prospects.
How to Make the Right Pick?
With the presence of several industry players, finding the technology stocks with the potential to beat earnings estimates can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks, which have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this apt combination of ingredients, the odds of a positive earnings surprise are as high as 70%.
Top Bets
Given below are five technology stocks that have the right combination of elements to beat on earnings this reporting cycle:
The company is scheduled to report third-quarter fiscal 2021 results on Jul 27. The Zacks Consensus Estimate for its earnings has moved up by a penny to $1 per share over the past 30 days.
Wallingford, CT-based Amphenol (APH - Free Report) has a Zacks Rank of 2 and an Earnings ESP of +1.29%. The company is scheduled to report second-quarter 2021 results on Jul 28.
The Zacks Consensus Estimate for its earnings has been unchanged at 55 cents per share over the past 30 days.
Mountain View, CA-based Alphabet (GOOGL - Free Report) currently has a Zacks Rank #2 and an Earnings ESP of +5.41%.
The company is set to report second-quarter 2021 results on Jul 27. The consensus mark for earnings has risen 0.6% to $19.75 per share over the past 30 days.
Menlo Park, CA-based Facebook is set to report second-quarter fiscal 2021 results on Jul 28. The company has an Earnings ESP of +9.51% and a Zacks Rank of 3.
The consensus estimate for its earnings has inched up by a penny to $3.04 per share over the past 30 days.
Image: Bigstock
5 Technology Stocks Poised to Beat Earnings Estimates in Q2
The technology sector had a terrific second-quarter 2021 driven by coronavirus-led digitalization as well as changing consumer preference and behavior.
Rapid adoption of cloud computing and the integration of AI and machine learning have been key catalysts. This is expected to drive second-quarter 2021 results for players in the sector.
Technology stocks are riding on continuing work-from-home and online learning wave that have kept demand for remote-working tech, including advanced technology-based virtual meetings and conference tools, cloud services and cybersecurity solutions, high in the to-be-reported quarter.
The work-and-learn-from-home necessity has propelled demand for PCs, notebooks, peripheral accessories and cloud storage. All of these, in turn, are fueling growth for high-speed Internet services.
Although PC shipments have shown signs of slowing down in the second quarter, demand for notebooks has been noteworthy. Per IDC data, PC shipments in second-quarter 2021 improved 13.2% year over year to 83.6 million units.
Moreover, short supply of chips is opening up opportunities for semiconductor companies. Notably, the U.S. Senate has passed a bill that allocates $52 billion for the American semiconductor industry in an attempt to bolster chip manufacturing as well as improve competitive prowess against China.
Also, contactless payment and delivery have gained significant traction during the outbreak. Further, an e-commerce boom prompted by changing consumer behavior is expected to have benefited top-line growth.
However, higher inflation has been a bother for the technology sector last quarter. Higher inflation means increased borrowing costs as well as input costs. As majority of technology companies rely on borrowing to expand their businesses, a higher inflation rate has been damaging to their prospects.
How to Make the Right Pick?
With the presence of several industry players, finding the technology stocks with the potential to beat earnings estimates can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks, which have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this apt combination of ingredients, the odds of a positive earnings surprise are as high as 70%.
Top Bets
Given below are five technology stocks that have the right combination of elements to beat on earnings this reporting cycle:
Cupertino, CA-based Apple (AAPL - Free Report) has an Earnings ESP of +3.40% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to report third-quarter fiscal 2021 results on Jul 27. The Zacks Consensus Estimate for its earnings has moved up by a penny to $1 per share over the past 30 days.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Santa Clara, CA-based Advanced Micro Devices (AMD - Free Report) is scheduled to report second-quarter 2021 results on Jul 27.
The company has a Zacks Rank #2 and an Earnings ESP of +3.41%.
The Zacks Consensus Estimate for its earnings was unchanged at 54 cents per share over the past month.
Advanced Micro Devices, Inc. Price and EPS Surprise
Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. Quote
Wallingford, CT-based Amphenol (APH - Free Report) has a Zacks Rank of 2 and an Earnings ESP of +1.29%. The company is scheduled to report second-quarter 2021 results on Jul 28.
The Zacks Consensus Estimate for its earnings has been unchanged at 55 cents per share over the past 30 days.
Amphenol Corporation Price and EPS Surprise
Amphenol Corporation price-eps-surprise | Amphenol Corporation Quote
Mountain View, CA-based Alphabet (GOOGL - Free Report) currently has a Zacks Rank #2 and an Earnings ESP of +5.41%.
The company is set to report second-quarter 2021 results on Jul 27. The consensus mark for earnings has risen 0.6% to $19.75 per share over the past 30 days.
Alphabet Inc. Price and EPS Surprise
Alphabet Inc. price-eps-surprise | Alphabet Inc. Quote
Menlo Park, CA-based Facebook is set to report second-quarter fiscal 2021 results on Jul 28. The company has an Earnings ESP of +9.51% and a Zacks Rank of 3.
The consensus estimate for its earnings has inched up by a penny to $3.04 per share over the past 30 days.
Facebook, Inc. Price and EPS Surprise
Facebook, Inc. price-eps-surprise | Facebook, Inc. Quote