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The Zacks Analyst Blog Arista Networks, Corning, PayPal, Paycom and Twilio
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For Immediate Releases
Chicago, IL – July 18, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Arista Networks (ANET - Free Report) , Corning (GLW - Free Report) , PayPal (PYPL - Free Report) , Paycom Software (PAYC - Free Report) and Twilio (TWLO - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
5 Technology Stocks Poised to Beat Earnings Estimates in Q2
The technology sector witnessed growth in the second quarter of 2024, driven by strong adoption of AI and machine learning as well as Generative AI (GenAI).
The sector is riding on the ongoing digitalization wave. The rapid adoption of cloud computing, 5G, the Internet of Things, wearables, headsets supporting augmented and virtual reality technologies, drones and blockchain is expected to have aided sector participants.
AI demand is escalating, and that has increased the need for data center capacity expansion. Leading cloud computing providers like Amazon, Alphabet, Microsoft and Meta platforms have multi-year investment plans to support greater cloud capacity.
The advent of GenAI has further attracted investments. Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. GenAI software spending is expected to surge from 8% in 2023 to 35% by 2027. Deloitte expects enterprise spending on GenAI to increase 30% in 2024 from $16 billion in 2023.
Large Language Models that form the backbone of GenAI require significant computational power to process massive amounts of data. The growing proliferation of GenAI has boosted the demand for chips, particularly graphics processing units, benefiting semiconductor companies.
Per the Semiconductor Industry Association data, semiconductor sales in May were $41.2 billion, up 4.1% year over year. In April, sales were $46.4 billion, up 15.8% year over year.
Moreover, the PC segment witnessed growth in the second quarter of 2024. Per IDC’s latest report, 64.9 million PCs were shipped, up 3% from the year-ago period. Lenovo and HP witnessed growth of 3.7% and 1.8%, respectively, while Dell Technologies lost 2.4%.
Upcoming Earnings to Watch
A chunk of technology companies are set to report their earnings results over the next couple of weeks. 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 second-quarter 2024 results on Jul 30. The Zacks Consensus Estimate for earnings has increased by a penny to $1.94 per share over the past 30 days.
New York-based Corning is scheduled to report its second-quarter 2024 results on Jul 30.
The company has an Earnings ESP of +1.59% and a Zacks Rank #1.
The Zacks Consensus Estimate for earnings has increased by a penny to 46 cents per share over the past month.
San Jose, CA-based PayPal is set to report first-quarter 2024 results on Apr 24. The company has an Earnings ESP of +1.68% and a Zacks Rank of 1.
The consensus estimate for its earnings has been unchanged at 95 cents per share over the past 30 days.
Oklahoma City, OK-based Paycom Software has an Earnings ESP of +9.11% and a Zacks Rank of 1. The company is scheduled to report its second-quarter 2024 results on Jul 31.
The Zacks Consensus Estimate for earnings has been steady at $1.59 per share over the past 30 days.
San Francisco, CA-based Twilio currently has an Earnings ESP of +2.34% and a Zacks Rank #1.
Twilio Inc. Price and EPS Surprise
The company is set to report second-quarter 2024 results on Aug 1. The consensus mark for earnings has been steady at 71 cents per share over the past 30 days.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Arista Networks, Corning, PayPal, Paycom and Twilio
For Immediate Releases
Chicago, IL – July 18, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Arista Networks (ANET - Free Report) , Corning (GLW - Free Report) , PayPal (PYPL - Free Report) , Paycom Software (PAYC - Free Report) and Twilio (TWLO - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
5 Technology Stocks Poised to Beat Earnings Estimates in Q2
The technology sector witnessed growth in the second quarter of 2024, driven by strong adoption of AI and machine learning as well as Generative AI (GenAI).
The sector is riding on the ongoing digitalization wave. The rapid adoption of cloud computing, 5G, the Internet of Things, wearables, headsets supporting augmented and virtual reality technologies, drones and blockchain is expected to have aided sector participants.
AI demand is escalating, and that has increased the need for data center capacity expansion. Leading cloud computing providers like Amazon, Alphabet, Microsoft and Meta platforms have multi-year investment plans to support greater cloud capacity.
The advent of GenAI has further attracted investments. Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. GenAI software spending is expected to surge from 8% in 2023 to 35% by 2027. Deloitte expects enterprise spending on GenAI to increase 30% in 2024 from $16 billion in 2023.
Large Language Models that form the backbone of GenAI require significant computational power to process massive amounts of data. The growing proliferation of GenAI has boosted the demand for chips, particularly graphics processing units, benefiting semiconductor companies.
Per the Semiconductor Industry Association data, semiconductor sales in May were $41.2 billion, up 4.1% year over year. In April, sales were $46.4 billion, up 15.8% year over year.
Moreover, the PC segment witnessed growth in the second quarter of 2024. Per IDC’s latest report, 64.9 million PCs were shipped, up 3% from the year-ago period. Lenovo and HP witnessed growth of 3.7% and 1.8%, respectively, while Dell Technologies lost 2.4%.
Upcoming Earnings to Watch
A chunk of technology companies are set to report their earnings results over the next couple of weeks. 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:
Santa Clara, CA-based Arista Networks has an Earnings ESP of +0.95% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to report its second-quarter 2024 results on Jul 30. The Zacks Consensus Estimate for earnings has increased by a penny to $1.94 per share over the past 30 days.
New York-based Corning is scheduled to report its second-quarter 2024 results on Jul 30.
The company has an Earnings ESP of +1.59% and a Zacks Rank #1.
The Zacks Consensus Estimate for earnings has increased by a penny to 46 cents per share over the past month.
San Jose, CA-based PayPal is set to report first-quarter 2024 results on Apr 24. The company has an Earnings ESP of +1.68% and a Zacks Rank of 1.
The consensus estimate for its earnings has been unchanged at 95 cents per share over the past 30 days.
Oklahoma City, OK-based Paycom Software has an Earnings ESP of +9.11% and a Zacks Rank of 1. The company is scheduled to report its second-quarter 2024 results on Jul 31.
The Zacks Consensus Estimate for earnings has been steady at $1.59 per share over the past 30 days.
San Francisco, CA-based Twilio currently has an Earnings ESP of +2.34% and a Zacks Rank #1.
Twilio Inc. Price and EPS Surprise
The company is set to report second-quarter 2024 results on Aug 1. The consensus mark for earnings has been steady at 71 cents per share over the past 30 days.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.