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5 Technology Stocks Poised to Beat Earnings Estimates in Q4
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The technology sector had a strong fourth-quarter 2023, driven by an improving global macro-economic environment, eased inflation and strong adoption of AI and machine learning.
The technology sector is expected to have benefited from ongoing digitalization. The rapid adoption of cloud computing, big data, the Internet of Things, wearables, VR headsets, drones, virtual reality, machine learning, digital communication, blockchain and 5G technology is expected to have aided sector participants.
The advent of generative AI has further attracted investments. The technology has already proven beneficial across a variety of industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy and utilities, and video game development.
The growing proliferation of generative AI has boosted the demand for chips, benefiting semiconductor sales. Per the latest data from the Semiconductor Industry Association, semiconductor sales in November were $48 billion, up 5.3% month-over-month. In October, sales were $46.6 billion, up 3.9% over September.
Moreover, the PC segment showed signs of recovery in the to-be-reported quarter. Per Gartner’s latest report, 63.3 million PCs were shipped in the fourth quarter (ended in December) of 2023, up 0.3% from the year-ago period. Lenovo and HP witnessed growth of 3.2% and 5.6%, respectively, while Dell Technologies lost 8.3%.
Upcoming Earnings to Watch
A chunk of technology companies are set to report their earnings results over the next couple of weeks. We believe that several are well-poised to beat earnings estimates due to a strong product portfolio powered by increasing usage of AI.
Hence, finding 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 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 that 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 combination of ingredients, the odds of a positive earnings surprise are as high as 70%.
Top Bets
The five technology stocks mentioned below have the right combination of elements to beat on earnings this reporting cycle:
The company is scheduled to report its first-quarter fiscal 2024 results on Feb 1. The Zacks Consensus Estimate for earnings has increased by a penny to $2.09 per share over the past 30 days.
The Netherlands-based ASML Holding (ASML - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank of 2. The company is scheduled to report its fourth-quarter 2023 results on Jan 24.
The Zacks Consensus Estimate for earnings has increased by 0.8% to $5.12 per share over the past 30 days.
Everett, WA-based Fortive (FTV - Free Report) currently has an Earnings ESP of +0.64% and a Zacks Rank #2.
The company is set to report fourth-quarter 2023 results on Jan 31. The consensus mark for earnings has been steady at 93 cents per share over the past 30 days.
Menlo Park, CA-based Meta Platforms (META - Free Report) is set to report fourth-quarter 2023 results on Feb 1. The company has an Earnings ESP of +1.46% and a Zacks Rank of 2.
The consensus estimate for its earnings has moved up by 0.6% to $4.80 per share over the past 30 days.
Image: Shutterstock
5 Technology Stocks Poised to Beat Earnings Estimates in Q4
The technology sector had a strong fourth-quarter 2023, driven by an improving global macro-economic environment, eased inflation and strong adoption of AI and machine learning.
The technology sector is expected to have benefited from ongoing digitalization. The rapid adoption of cloud computing, big data, the Internet of Things, wearables, VR headsets, drones, virtual reality, machine learning, digital communication, blockchain and 5G technology is expected to have aided sector participants.
The advent of generative AI has further attracted investments. The technology has already proven beneficial across a variety of industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy and utilities, and video game development.
The growing proliferation of generative AI has boosted the demand for chips, benefiting semiconductor sales. Per the latest data from the Semiconductor Industry Association, semiconductor sales in November were $48 billion, up 5.3% month-over-month. In October, sales were $46.6 billion, up 3.9% over September.
Moreover, the PC segment showed signs of recovery in the to-be-reported quarter. Per Gartner’s latest report, 63.3 million PCs were shipped in the fourth quarter (ended in December) of 2023, up 0.3% from the year-ago period. Lenovo and HP witnessed growth of 3.2% and 5.6%, respectively, while Dell Technologies lost 8.3%.
Upcoming Earnings to Watch
A chunk of technology companies are set to report their earnings results over the next couple of weeks. We believe that several are well-poised to beat earnings estimates due to a strong product portfolio powered by increasing usage of AI.
Hence, finding 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 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 that 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 combination of ingredients, the odds of a positive earnings surprise are as high as 70%.
Top Bets
The five technology stocks mentioned below 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 +2.13% and currently has 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 its first-quarter fiscal 2024 results on Feb 1. The Zacks Consensus Estimate for earnings has increased by a penny to $2.09 per share over the past 30 days.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Wallingford, CT-based Amphenol (APH - Free Report) is scheduled to report its fourth-quarter 2023 results on Jan 24.
The company has an Earnings ESP of +1.74% and a Zacks Rank #2.
The Zacks Consensus Estimate for earnings has increased by a penny to 77 cents per share over the past month.
Amphenol Corporation Price and EPS Surprise
Amphenol Corporation price-eps-surprise | Amphenol Corporation Quote
The Netherlands-based ASML Holding (ASML - Free Report) has an Earnings ESP of +3.32% and a Zacks Rank of 2. The company is scheduled to report its fourth-quarter 2023 results on Jan 24.
The Zacks Consensus Estimate for earnings has increased by 0.8% to $5.12 per share over the past 30 days.
ASML Holding N.V. Price and EPS Surprise
ASML Holding N.V. price-eps-surprise | ASML Holding N.V. Quote
Everett, WA-based Fortive (FTV - Free Report) currently has an Earnings ESP of +0.64% and a Zacks Rank #2.
The company is set to report fourth-quarter 2023 results on Jan 31. The consensus mark for earnings has been steady at 93 cents per share over the past 30 days.
Fortive Corporation Price and EPS Surprise
Fortive Corporation price-eps-surprise | Fortive Corporation Quote
Menlo Park, CA-based Meta Platforms (META - Free Report) is set to report fourth-quarter 2023 results on Feb 1. The company has an Earnings ESP of +1.46% and a Zacks Rank of 2.
The consensus estimate for its earnings has moved up by 0.6% to $4.80 per share over the past 30 days.
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote