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5 Tech Bigwigs to Buy Ahead of Earnings Results Next Week
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We are in the middle of the fourth-quarter 2021 earnings season with corporate bigwigs across different sectors releasing their financial numbers. So far this reporting cycle, results have come in well above initial expectations. Earnings results have helped Wall Street regain its northward momentum after a tumultuous January.
Next week, several corporate bigwigs including technology companies will release their financial numbers. At this stage, it will be prudent to investment in technology stocks with a favorable Zacks Rank that are set to beat on earnings results. Five of them are Arista Networks Inc. (ANET - Free Report) , Analog Devices Inc. (ADI - Free Report) Applied Materials Inc. (AMAT - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Keysight Technologies Inc. (KEYS - Free Report) .
Robust Fourth-Quarter Earnings So Far
As of Feb 9, 317 S&P 500 companies reported fourth-quarter 2021 results. Total earnings of these companies are up 30.8% year over year on 16.1% higher revenues with 77.9% beating EPS estimates and 76.3% surpassing revenue estimates.
Total fourth-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to climb 30.6% from the same period last year on 14.7% higher revenues following 41.4% year-over-year earnings growth on 17.4% higher revenues in the third quarter, 95% year-over-year earnings growth on 25.3% higher revenues in the second quarter and 49.3% year-over-year earnings growth on 10.3% higher revenues in first-quarter 2021.
The first three quarters of last year were favorably impacted since the preceding quarters of the year before that were affected by pandemic-induced lockdowns and restrictions. However, the U.S. economy started reopening at a slow pace since the beginning of the fourth quarter of 2020.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
Arista Networks develops markets and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. ANET benefits from the expanding cloud networking market, driven by strong demand for scalable infrastructure. The company recently joined the Microsoft Intelligent Security Association.
Arista Networks continues to gain from solid momentum and diversification across its top verticals and product lines. It is well-poised for growth in the data-driven cloud networking business, with proactive platforms and predictive operations. ANET introduced an enterprise-grade Software-as-a-Service offering for its flagship CloudVision platform.
Arista Networks has an Earnings ESP of +0.95% for fourth-quarter 2021. It has an expected earnings growth rate of 26.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 30 days.
ANET recorded earnings surprises in the last four reported quarters, with an average beat of 6%. Arista Networks is set to release earnings results on Feb 14, after the closing bell.
Analog Devices has strength across communication, consumer, industrial and automotive end-markets. Further, solid demand for high-performance analog and mixed-signal solutions was a tailwind. Growing momentum across the electric vehicle space on the back of robust Battery Management System solutions remains a positive for ADI.
Further, growing power design wins are the other positives for Analog Devices. The solid momentum of the HEV platform across cabin electronics ecosystem remains a tailwind for ADI. Moreover, Analog Devices remains optimistic about the growth prospects associated with its Maxim acquisition and 5G.
Analog Devices has an Earnings ESP of +0.25% for first-quarter fiscal 2022. It has an expected earnings growth rate of 10.6% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 0.9% over the last 30 days.
ADI recorded earnings surprises in the last four reported quarters, with an average beat of 6.1%. Analog Devices is set to release earnings results on Feb 16, before the opening bell.
Applied Materials is benefiting from strong momentum across Semiconductor Systems & Applied Global Services. Further, solid demand for silicon in several applications across various markets remains a tailwind for AMAT. The growing usage of OLED technology in smartphones, televisions and computers, remains a positive for Applied Materials.
Further, increased customer spending in foundry & logic on the back of the rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets, is a major positive for AMAT. Also, strong momentum in conductor etches is benefiting Applied Materials’ position in DRAM and NAND.
Applied Materials has an Earnings ESP of +0.93% for first-quarter fiscal 2022. It has an expected earnings growth rate of 19.2% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 0.2% over the last 30 days.
AMAT recorded earnings surprises in the last four reported quarters, with an average beat of 2.9%. Applied Materials is set to release earnings results on Feb 16, after the closing bell.
NVIDIA is benefiting from the coronavirus-induced work and learn-at-home wave. NVIDIA is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for NVIDIA’s Data Center business.
The expansion of NVIDIA GeForce NOW is expected to drive its user base. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. The collaboration with Daimler-owned Mercedes-Benz is expected to strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics spaces.
NVIDIA has an Earnings ESP of +1.37% for fourth-quarter fiscal 2022. It has an expected earnings growth rate of 18.8% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.8% over the last 30 days.
NVDA recorded earnings surprises in the last four reported quarters, with an average beat of 7.7%. NVIDIA is set to release earnings results on Feb 16, after the closing bell.
Keysight Technologies provides electronic design and test solutions to commercial communications, networking, aerospace, defense and government, automotive, energy, semiconductor, and electronic industries in the Americas and the Asia Pacific. KEYS is well-positioned to gain from solid demand for semiconductor measurement solutions, as semiconductor companies are increasingly developing chips based on next-generation process technologies.
Accelerated 5G deployments, 6G-related research applications and higher investments in 400G/ 800G ethernet for data centers bode well for Keysight Technologies. KEYS likely to benefit from investments in defense technology modernization across all main regions.
Keysight Technologies has an Earnings ESP of +1.15% for first-quarter fiscal 2022. It has an expected earnings growth rate of 11.1% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 2.2% over the last 30 days.
KEYS recorded earnings surprises in the last four reported quarters, with an average beat of 7.1%. Keysight Technologies is set to release earnings results on Feb 17, after the closing bell.
Image: Shutterstock
5 Tech Bigwigs to Buy Ahead of Earnings Results Next Week
We are in the middle of the fourth-quarter 2021 earnings season with corporate bigwigs across different sectors releasing their financial numbers. So far this reporting cycle, results have come in well above initial expectations. Earnings results have helped Wall Street regain its northward momentum after a tumultuous January.
Next week, several corporate bigwigs including technology companies will release their financial numbers. At this stage, it will be prudent to investment in technology stocks with a favorable Zacks Rank that are set to beat on earnings results. Five of them are Arista Networks Inc. (ANET - Free Report) , Analog Devices Inc. (ADI - Free Report) Applied Materials Inc. (AMAT - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Keysight Technologies Inc. (KEYS - Free Report) .
Robust Fourth-Quarter Earnings So Far
As of Feb 9, 317 S&P 500 companies reported fourth-quarter 2021 results. Total earnings of these companies are up 30.8% year over year on 16.1% higher revenues with 77.9% beating EPS estimates and 76.3% surpassing revenue estimates.
Total fourth-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to climb 30.6% from the same period last year on 14.7% higher revenues following 41.4% year-over-year earnings growth on 17.4% higher revenues in the third quarter, 95% year-over-year earnings growth on 25.3% higher revenues in the second quarter and 49.3% year-over-year earnings growth on 10.3% higher revenues in first-quarter 2021.
The first three quarters of last year were favorably impacted since the preceding quarters of the year before that were affected by pandemic-induced lockdowns and restrictions. However, the U.S. economy started reopening at a slow pace since the beginning of the fourth quarter of 2020.
Our Top Picks
Five technology bigwigs will report earnings results next week. Each of these stocks carries a Zacks Rank# 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Arista Networks develops markets and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. ANET benefits from the expanding cloud networking market, driven by strong demand for scalable infrastructure. The company recently joined the Microsoft Intelligent Security Association.
Arista Networks continues to gain from solid momentum and diversification across its top verticals and product lines. It is well-poised for growth in the data-driven cloud networking business, with proactive platforms and predictive operations. ANET introduced an enterprise-grade Software-as-a-Service offering for its flagship CloudVision platform.
Arista Networks has an Earnings ESP of +0.95% for fourth-quarter 2021. It has an expected earnings growth rate of 26.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 30 days.
ANET recorded earnings surprises in the last four reported quarters, with an average beat of 6%. Arista Networks is set to release earnings results on Feb 14, after the closing bell.
Analog Devices has strength across communication, consumer, industrial and automotive end-markets. Further, solid demand for high-performance analog and mixed-signal solutions was a tailwind. Growing momentum across the electric vehicle space on the back of robust Battery Management System solutions remains a positive for ADI.
Further, growing power design wins are the other positives for Analog Devices. The solid momentum of the HEV platform across cabin electronics ecosystem remains a tailwind for ADI. Moreover, Analog Devices remains optimistic about the growth prospects associated with its Maxim acquisition and 5G.
Analog Devices has an Earnings ESP of +0.25% for first-quarter fiscal 2022. It has an expected earnings growth rate of 10.6% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 0.9% over the last 30 days.
ADI recorded earnings surprises in the last four reported quarters, with an average beat of 6.1%. Analog Devices is set to release earnings results on Feb 16, before the opening bell.
Applied Materials is benefiting from strong momentum across Semiconductor Systems & Applied Global Services. Further, solid demand for silicon in several applications across various markets remains a tailwind for AMAT. The growing usage of OLED technology in smartphones, televisions and computers, remains a positive for Applied Materials.
Further, increased customer spending in foundry & logic on the back of the rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets, is a major positive for AMAT. Also, strong momentum in conductor etches is benefiting Applied Materials’ position in DRAM and NAND.
Applied Materials has an Earnings ESP of +0.93% for first-quarter fiscal 2022. It has an expected earnings growth rate of 19.2% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 0.2% over the last 30 days.
AMAT recorded earnings surprises in the last four reported quarters, with an average beat of 2.9%. Applied Materials is set to release earnings results on Feb 16, after the closing bell.
NVIDIA is benefiting from the coronavirus-induced work and learn-at-home wave. NVIDIA is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for NVIDIA’s Data Center business.
The expansion of NVIDIA GeForce NOW is expected to drive its user base. Further, the solid uptake of AI-based smart cockpit infotainment solutions is a boon. The collaboration with Daimler-owned Mercedes-Benz is expected to strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics spaces.
NVIDIA has an Earnings ESP of +1.37% for fourth-quarter fiscal 2022. It has an expected earnings growth rate of 18.8% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.8% over the last 30 days.
NVDA recorded earnings surprises in the last four reported quarters, with an average beat of 7.7%. NVIDIA is set to release earnings results on Feb 16, after the closing bell.
Keysight Technologies provides electronic design and test solutions to commercial communications, networking, aerospace, defense and government, automotive, energy, semiconductor, and electronic industries in the Americas and the Asia Pacific. KEYS is well-positioned to gain from solid demand for semiconductor measurement solutions, as semiconductor companies are increasingly developing chips based on next-generation process technologies.
Accelerated 5G deployments, 6G-related research applications and higher investments in 400G/ 800G ethernet for data centers bode well for Keysight Technologies. KEYS likely to benefit from investments in defense technology modernization across all main regions.
Keysight Technologies has an Earnings ESP of +1.15% for first-quarter fiscal 2022. It has an expected earnings growth rate of 11.1% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings improved 2.2% over the last 30 days.
KEYS recorded earnings surprises in the last four reported quarters, with an average beat of 7.1%. Keysight Technologies is set to release earnings results on Feb 17, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.