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5 Large Cap Technology Stocks for Momentum Investors
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Investing in large-cap companies is a safe bet, especially during economic downturns and stringent credit conditions. Many consider large-cap stocks an essential part of their portfolio, given the stability, healthy dividends and safety cushion they offer.
Large-cap funds are ideal investment options for those seeking high returns. These also come with lower risk than small-cap and mid-cap funds.
Technology Sector Outshines
Technology has been one of the most lucrative sectors for investors, year to date. This is evident from the NASDAQ Composite (IXIC) and the S&P 500’s (GSPC) rally of 7.5% and 25%, respectively, so far this year.
Among sectors, technology continues to shine, with the Technology Select Sector SPDR ETF (“XLK”) registering a return of 9.5% year to date.
The sector is benefiting from increasing demand for cutting-edge technology such as cloud computing, Big Data, Internet of Things (IoT), wearables, AR/VR headsets, drones, self-driving cars and artificial intelligence (AI).
Although technology stocks will gain less from the corporate tax cuts, they hoard massive amounts of cash overseas and are poised to benefit the most from Trump's repatriation policy. Moreover, higher domestic cash level will make the technology stocks less susceptible to an anticipated interest rate hike in 2018.
Moreover, escalating demand for sensors and software for autonomous vehicles, advanced driver assisted systems (ADAS), Augmented/Virtual reality devices (AR/VR) and Internet of Things (IoT) are significant catalysts.
Further, rapid development of 5G platform and technology has emerged as the next growth driver for these companies.
In view of these bullish sentiments, momentum investing can be a winning strategy for those seeking high returns in a short span. This strategy focuses on hot stocks that have been gaining over the past few weeks or months.
Spending to Grow Aggressively
BlackRock expects ADAS market to grow at least 20% each year through 2025, creating significant growth opportunity for manufacturers of camera lenses, sensors and other items.
Per market research firm IDC, global spending on robotics and drones solutions will increase 22.1% year over year to $103.1 billion in 2018. This spending is projected to grow at a CAGR of 25.4% over 2018-20121 time frame to $218.4 billion.
Moreover, global spending on IoT will grow 14.6% year over year to reach $772.5 billion in 2018. IDC predicts global spending on IoT to surpass $1 trillion mark in 2020 and reach $1.1 trillion by 2021.
Our Choices
We believe that the bullish projections present significant growth opportunity for momentum investors, who look for high returns in a short span.
Momentum investing is not so easy due to market volatility but success comes only to those who can effectively ride the upswing and brave the downswing of the market with the same style. It is here that the Zacks Style Score System can come in handy.
We use the Zacks Momentum Style Score to pick stocks. The style score indicates the best time to buy a stock and take advantage of its momentum with a highest probability of success. Moreover, we prefer large caps due to their fundamental strength and stability amid increasing volatility in markets.
Back-tested results show that stocks with Momentum Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here, we have identified five great momentum stocks, each having market cap of more than $10 billion.
NVIDIA Corp. (NVDA - Free Report) offers graphics chip processors and related software for a wide range of visual computing platforms. The Santa Clara, CA-based company has returned 28.2% year to date, substantially outperforming the S&P 500 index.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA is witnessing upward estimate revisions — up 85 cents to $7.90 per share for the current year in the last 30 days.
Notably, the company has beaten the Zacks Consensus Estimate in the trailing four-quarters with an average positive surprise of 40.1%.
NVIDIA has a Momentum Style Score of B and a Zacks Rank #1.
Micron Technology (MU - Free Report) is a well-known provider of Dynamic Random Access Memory (“DRAM”) and NAND flash memory. Since a major portion of the revenues are derived from DRAM sales, rising prices due to paucity in supply bodes well for the company. It has returned 49.5% on a year-to-date basis.
Micron is witnessing upward estimate revisions — up 33 cents to $11.32 per share for the current year in the last 30 days.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 8%.
Micron has a Momentum Style Score of A and a Zacks Rank #1.
Seagate Technology (STX - Free Report) offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. The company also provides data storage services for businesses, including online backup, data protection and recovery solutions. Headquartered in Dublin, Ireland, Seagate has returned 40.8% year to date.
Seagate Technology PLC Price, Consensus and EPS Surprise
Seagate is witnessing upward estimate revisions — up 35 cents to $5.34 per share for the current year in the last 30 days.
Seagate has delivered a positive earnings surprise of 7.4% in the last reported quarter.
Seagate has a Momentum Style Score of B and a Zacks Rank #1.
Salesforce.com (CRM - Free Report) is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, which enables organizations to better manage critical operations. These include sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. The company has returned 25.9% on a year-to-date basis.
Salesforce is witnessing upward estimate revisions — up 10 cents to $2.13 per share for the current year in the last 60 days.
Salesforce.com Inc Price, Consensus and EPS Surprise
Salesforce has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 6.4%.
Salesforcehas a Momentum Style Score of A and a Zacks Rank #1.
SAP SE (SAP - Free Report) is one of the largest independent software vendors in the world and the leading provider of enterprise resource planning (ERP) software. Its solutions are designed to cater to the needs of organizations, ranging from small and medium businesses to large, global enterprises. The company has returned 3% on a year-to-date basis.
SAP is witnessing upward estimate revisions — up 5 cents to $2.13 per share for the current year in the last 60 days.
SAP has surpassed the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 6.1%.
SAP has a Momentum Style Score of B and a Zacks Rank #1.
Looking for Stocks with Skyrocketing Upside?
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Image: Bigstock
5 Large Cap Technology Stocks for Momentum Investors
Investing in large-cap companies is a safe bet, especially during economic downturns and stringent credit conditions. Many consider large-cap stocks an essential part of their portfolio, given the stability, healthy dividends and safety cushion they offer.
Large-cap funds are ideal investment options for those seeking high returns. These also come with lower risk than small-cap and mid-cap funds.
Technology Sector Outshines
Technology has been one of the most lucrative sectors for investors, year to date. This is evident from the NASDAQ Composite (IXIC) and the S&P 500’s (GSPC) rally of 7.5% and 25%, respectively, so far this year.
Among sectors, technology continues to shine, with the Technology Select Sector SPDR ETF (“XLK”) registering a return of 9.5% year to date.
The sector is benefiting from increasing demand for cutting-edge technology such as cloud computing, Big Data, Internet of Things (IoT), wearables, AR/VR headsets, drones, self-driving cars and artificial intelligence (AI).
Although technology stocks will gain less from the corporate tax cuts, they hoard massive amounts of cash overseas and are poised to benefit the most from Trump's repatriation policy. Moreover, higher domestic cash level will make the technology stocks less susceptible to an anticipated interest rate hike in 2018.
Moreover, escalating demand for sensors and software for autonomous vehicles, advanced driver assisted systems (ADAS), Augmented/Virtual reality devices (AR/VR) and Internet of Things (IoT) are significant catalysts.
Further, rapid development of 5G platform and technology has emerged as the next growth driver for these companies.
In view of these bullish sentiments, momentum investing can be a winning strategy for those seeking high returns in a short span. This strategy focuses on hot stocks that have been gaining over the past few weeks or months.
Spending to Grow Aggressively
BlackRock expects ADAS market to grow at least 20% each year through 2025, creating significant growth opportunity for manufacturers of camera lenses, sensors and other items.
Per market research firm IDC, global spending on robotics and drones solutions will increase 22.1% year over year to $103.1 billion in 2018. This spending is projected to grow at a CAGR of 25.4% over 2018-20121 time frame to $218.4 billion.
Moreover, global spending on IoT will grow 14.6% year over year to reach $772.5 billion in 2018. IDC predicts global spending on IoT to surpass $1 trillion mark in 2020 and reach $1.1 trillion by 2021.
Our Choices
We believe that the bullish projections present significant growth opportunity for momentum investors, who look for high returns in a short span.
Momentum investing is not so easy due to market volatility but success comes only to those who can effectively ride the upswing and brave the downswing of the market with the same style. It is here that the Zacks Style Score System can come in handy.
We use the Zacks Momentum Style Score to pick stocks. The style score indicates the best time to buy a stock and take advantage of its momentum with a highest probability of success. Moreover, we prefer large caps due to their fundamental strength and stability amid increasing volatility in markets.
Back-tested results show that stocks with Momentum Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here, we have identified five great momentum stocks, each having market cap of more than $10 billion.
NVIDIA Corp. (NVDA - Free Report) offers graphics chip processors and related software for a wide range of visual computing platforms. The Santa Clara, CA-based company has returned 28.2% year to date, substantially outperforming the S&P 500 index.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation Price, Consensus and EPS Surprise | NVIDIA Corporation Quote
NVIDIA is witnessing upward estimate revisions — up 85 cents to $7.90 per share for the current year in the last 30 days.
Notably, the company has beaten the Zacks Consensus Estimate in the trailing four-quarters with an average positive surprise of 40.1%.
NVIDIA has a Momentum Style Score of B and a Zacks Rank #1.
Micron Technology (MU - Free Report) is a well-known provider of Dynamic Random Access Memory (“DRAM”) and NAND flash memory. Since a major portion of the revenues are derived from DRAM sales, rising prices due to paucity in supply bodes well for the company. It has returned 49.5% on a year-to-date basis.
Micron is witnessing upward estimate revisions — up 33 cents to $11.32 per share for the current year in the last 30 days.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. Price, Consensus and EPS Surprise | Micron Technology, Inc. Quote
Micron has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 8%.
Micron has a Momentum Style Score of A and a Zacks Rank #1.
Seagate Technology (STX - Free Report) offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. The company also provides data storage services for businesses, including online backup, data protection and recovery solutions. Headquartered in Dublin, Ireland, Seagate has returned 40.8% year to date.
Seagate Technology PLC Price, Consensus and EPS Surprise
Seagate Technology PLC Price, Consensus and EPS Surprise | Seagate Technology PLC Quote
Seagate is witnessing upward estimate revisions — up 35 cents to $5.34 per share for the current year in the last 30 days.
Seagate has delivered a positive earnings surprise of 7.4% in the last reported quarter.
Seagate has a Momentum Style Score of B and a Zacks Rank #1.
Salesforce.com (CRM - Free Report) is the leading provider of on-demand Customer Relationship Management (CRM - Free Report) software, which enables organizations to better manage critical operations. These include sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. The company has returned 25.9% on a year-to-date basis.
Salesforce is witnessing upward estimate revisions — up 10 cents to $2.13 per share for the current year in the last 60 days.
Salesforce.com Inc Price, Consensus and EPS Surprise
Salesforce.com Inc Price, Consensus and EPS Surprise | Salesforce.com Inc Quote
Salesforce has beaten the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 6.4%.
Salesforcehas a Momentum Style Score of A and a Zacks Rank #1.
SAP SE (SAP - Free Report) is one of the largest independent software vendors in the world and the leading provider of enterprise resource planning (ERP) software. Its solutions are designed to cater to the needs of organizations, ranging from small and medium businesses to large, global enterprises. The company has returned 3% on a year-to-date basis.
SAP is witnessing upward estimate revisions — up 5 cents to $2.13 per share for the current year in the last 60 days.
SAP SE Price, Consensus and EPS Surprise
SAP SE Price, Consensus and EPS Surprise | SAP SE Quote
SAP has surpassed the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 6.1%.
SAP has a Momentum Style Score of B and a Zacks Rank #1.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>