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S&P 500 on Track to Hit New High: 4 Tech Stocks With Growth Potential
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Wall Street has resumed its rally after a hiccup earlier this month. September has been one of the worst months for stocks, but all three major indexes this year seem to be snapping the tradition.
The rally is once again being fueled by tech stocks that have been on a dream run since 2023. With the Federal Reserve’s rate cut on the anvil, tech stocks are set to get further and drive the market rally. It would thus be ideal to invest in tech stocks such as Adobe Inc. (ADBE - Free Report) , NetApp, Inc. (NTAP - Free Report) , Fortive Corporation (FTV - Free Report) and Arista Networks, Inc., (ANET - Free Report) with solid growth potential for this year.
S&P 500, Nasdaq Stocks Boost Rally
On Friday, the S&P 500 and the Nasdaq recorded their fifth straight session of gains, as investors rushed to buy mega-cap tech and semiconductors stocks. The S&P gained 0.5% to close at 5,626.02 points. The index is now less than 1% from its all-time high recorded in July.
The tech-heavy Nasdaq rose 07% to close at 17,638. 98 points. The S&P 500 and the Nasdaq have gained 18.6% and 19.8%, respectively.
A softer-than-expected August jobs report unsettled markets at the beginning of the month. Also, inflation data showed that the consumer price index (CPI) increased slightly by 0.2% in August, which somewhat dented investors’ sentiment.
However, investors have since regained their confidence as they took the positives from the CPI report that showed the inflation rate falling to its lowest level since February 2021. Market participants are now looking forward to the Federal Reserve’s rate cut, which is likely to happen this week.
Tech Stocks Boosting Market Rally Led by AI
The Nasdaq and the S&P 500’s recent rally is being fueled by tech stocks. Technology and semiconductor stocks have largely been responsible for the broader market rally since 2023. The Technology Select Sector SPDR (XLK) has gained 14.5% year to date.
One of the major reasons behind the rally is the enthusiasm surrounding artificial intelligence (AI), especially generative AI, spearheaded by the industry darling NVIDIA Corporation (NVDA - Free Report) .
Experts think AI has huge potential that hasn't been fully tapped into yet. NVIDIA's impressive achievements over the past year have encouraged many tech companies to explore AI's possibilities to secure lasting business benefits.
The advancement of smart devices is key in this area, as they need robust computing and learning abilities for tasks such as face detection, image recognition and video analysis. These functions demand significant processing power, speed, memory, energy efficiency, and advanced graphics processors, which in turn benefit the semiconductor industry.
Fed Set to Cut Rate in Upcoming FOMC Meeting
Although the latest inflation report has crushed hopes of a 50-basis point rate cut, market participants are confident that the Federal Reserve will go for a 25-basis point rate cut in its Sept. 17-18 meeting.
Any size of rate cut bodes well for the broader economy. Lower interest rates generally benefit growth assets by decreasing the opportunity cost of holding non-yielding assets, such as technology and semiconductor stocks.
Markets have so far tried to defy the stock market sluggishness in September. Moreover, the fourth quarter is about to begin, which is usually the best quarter of the year. Since 1950, the S&P has jumped more than 4% in the final three months of the year, with this rise occurring 80% of the time.
4 Tech Stocks to Buy Ahed of Fed’s Rate Cuts
We have chosen four top tech stocks from the S&P 500 that have seen positive earnings estimate revisions in the last 60 days and have strong potential for 2024. Each of the stocks has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adobe Inc.
Adobe Inc. is one of the largest software companies in the world. ADBE picks up licensing fees from customers, which form the bulk of its revenue. Adobe also offers technical support and education, which account for the balance.
Adobe has an expected earnings growth rate of 13.1% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.2% over the past 60 days. ADBE presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
NetApp, Inc.
NetApp, Inc. provides enterprise storage as well as data management software and hardware products and services. NTAP assists enterprises in managing multiple cloud environments, adopting next-generation technologies like AI, Kubernetes, and contemporary databases. It also helps in navigating the complexity brought about by the quick development of data and cloud usage.
NetApp has an expected earnings growth rate of 8.8% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.5% over the past 60 days. NTAP presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
Fortive Corporation
Fortive Corporation is a diversified industrial growth company. FTV provides essential technologies for connected workflow solutions on a global basis.
Fortive Corporation has an expected earnings growth rate of 11.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the past 60 days. FTV presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
Arista Networks, Inc.
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. ANET offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for the next-generation data center networks. Arista uses multiple silicon architectures across its products.
Arista Networks’ expected earnings growth rate for the current year is 18.7%. The Zacks Consensus Estimate for current-year earnings improved 3.9% over the past 60 days. ANET presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
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S&P 500 on Track to Hit New High: 4 Tech Stocks With Growth Potential
Wall Street has resumed its rally after a hiccup earlier this month. September has been one of the worst months for stocks, but all three major indexes this year seem to be snapping the tradition.
The rally is once again being fueled by tech stocks that have been on a dream run since 2023. With the Federal Reserve’s rate cut on the anvil, tech stocks are set to get further and drive the market rally. It would thus be ideal to invest in tech stocks such as Adobe Inc. (ADBE - Free Report) , NetApp, Inc. (NTAP - Free Report) , Fortive Corporation (FTV - Free Report) and Arista Networks, Inc., (ANET - Free Report) with solid growth potential for this year.
S&P 500, Nasdaq Stocks Boost Rally
On Friday, the S&P 500 and the Nasdaq recorded their fifth straight session of gains, as investors rushed to buy mega-cap tech and semiconductors stocks. The S&P gained 0.5% to close at 5,626.02 points. The index is now less than 1% from its all-time high recorded in July.
The tech-heavy Nasdaq rose 07% to close at 17,638. 98 points. The S&P 500 and the Nasdaq have gained 18.6% and 19.8%, respectively.
A softer-than-expected August jobs report unsettled markets at the beginning of the month. Also, inflation data showed that the consumer price index (CPI) increased slightly by 0.2% in August, which somewhat dented investors’ sentiment.
However, investors have since regained their confidence as they took the positives from the CPI report that showed the inflation rate falling to its lowest level since February 2021. Market participants are now looking forward to the Federal Reserve’s rate cut, which is likely to happen this week.
Tech Stocks Boosting Market Rally Led by AI
The Nasdaq and the S&P 500’s recent rally is being fueled by tech stocks. Technology and semiconductor stocks have largely been responsible for the broader market rally since 2023. The Technology Select Sector SPDR (XLK) has gained 14.5% year to date.
One of the major reasons behind the rally is the enthusiasm surrounding artificial intelligence (AI), especially generative AI, spearheaded by the industry darling NVIDIA Corporation (NVDA - Free Report) .
Experts think AI has huge potential that hasn't been fully tapped into yet. NVIDIA's impressive achievements over the past year have encouraged many tech companies to explore AI's possibilities to secure lasting business benefits.
The advancement of smart devices is key in this area, as they need robust computing and learning abilities for tasks such as face detection, image recognition and video analysis. These functions demand significant processing power, speed, memory, energy efficiency, and advanced graphics processors, which in turn benefit the semiconductor industry.
Fed Set to Cut Rate in Upcoming FOMC Meeting
Although the latest inflation report has crushed hopes of a 50-basis point rate cut, market participants are confident that the Federal Reserve will go for a 25-basis point rate cut in its Sept. 17-18 meeting.
Any size of rate cut bodes well for the broader economy. Lower interest rates generally benefit growth assets by decreasing the opportunity cost of holding non-yielding assets, such as technology and semiconductor stocks.
Markets have so far tried to defy the stock market sluggishness in September. Moreover, the fourth quarter is about to begin, which is usually the best quarter of the year. Since 1950, the S&P has jumped more than 4% in the final three months of the year, with this rise occurring 80% of the time.
4 Tech Stocks to Buy Ahed of Fed’s Rate Cuts
We have chosen four top tech stocks from the S&P 500 that have seen positive earnings estimate revisions in the last 60 days and have strong potential for 2024. Each of the stocks has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adobe Inc.
Adobe Inc. is one of the largest software companies in the world. ADBE picks up licensing fees from customers, which form the bulk of its revenue. Adobe also offers technical support and education, which account for the balance.
Adobe has an expected earnings growth rate of 13.1% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.2% over the past 60 days. ADBE presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
NetApp, Inc.
NetApp, Inc. provides enterprise storage as well as data management software and hardware products and services. NTAP assists enterprises in managing multiple cloud environments, adopting next-generation technologies like AI, Kubernetes, and contemporary databases. It also helps in navigating the complexity brought about by the quick development of data and cloud usage.
NetApp has an expected earnings growth rate of 8.8% for the current year. The Zacks Consensus Estimate for current-year earnings improved 2.5% over the past 60 days. NTAP presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
Fortive Corporation
Fortive Corporation is a diversified industrial growth company. FTV provides essential technologies for connected workflow solutions on a global basis.
Fortive Corporation has an expected earnings growth rate of 11.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.3% over the past 60 days. FTV presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
Arista Networks, Inc.
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. ANET offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for the next-generation data center networks. Arista uses multiple silicon architectures across its products.
Arista Networks’ expected earnings growth rate for the current year is 18.7%. The Zacks Consensus Estimate for current-year earnings improved 3.9% over the past 60 days. ANET presently has a Zacks Rank #2.
Image Source: Zacks Investment Research