Advertisement
U.S. markets close in 5 hours 45 minutes
  • S&P 500

    5,129.15
    -7.93 (-0.15%)
     
  • Dow 30

    38,975.89
    -111.49 (-0.29%)
     
  • Nasdaq

    16,232.16
    -42.78 (-0.26%)
     
  • Russell 2000

    2,088.84
    +12.44 (+0.60%)
     
  • Crude Oil

    79.80
    -0.17 (-0.21%)
     
  • Gold

    2,107.90
    +12.20 (+0.58%)
     
  • Silver

    23.71
    +0.35 (+1.48%)
     
  • EUR/USD

    1.0861
    +0.0022 (+0.21%)
     
  • 10-Yr Bond

    4.2090
    +0.0290 (+0.69%)
     
  • GBP/USD

    1.2690
    +0.0035 (+0.28%)
     
  • USD/JPY

    150.4000
    +0.3360 (+0.22%)
     
  • Bitcoin USD

    66,319.47
    +4,184.30 (+6.73%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,637.27
    -45.23 (-0.59%)
     
  • Nikkei 225

    40,109.23
    +198.41 (+0.50%)
     

2 Top-Ranked Tech Stocks to Buy Now for a Potential Santa Claus Rally

Technology stocks woke up from their mini slumber on Thursday. Buyers stepped in right near the Nasdaq’s 21-day moving average. The comeback and small gains through mid-afternoon trading Friday helped the tech-heavy index finally climb above its summer highs.

Wall Street is currently sorting through November’s jobs data. The figures were solid and showcase the resilient U.S. economy, pushing 10-year U.S. Treasury yields up to 4.23% vs. 4.15% on Thursday, both of which are still far below 5% on October 18.

Investors appear to be positioning themselves for a possible rally to new all-time highs in the coming months and the likelihood of a Santa Claus surge to end 2023 on a high note as Wall Street looks ahead to possible rate cuts next year.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

monday.com (MNDY)

Monday.com’s core business is centered around what it calls a work operating system. Monday.com’s Work OS is a “low code-no code” platform that enables its customers to build out work management tools and software applications to help run their business across various industries. Monday.com also operates a sales CRM segment and a Dev unit. Monday.com currently has roughly 190K customers around the world.

Monday.com operates in a key growth segment of the economy since every business needs to digitalize their workflows to thrive. MNDY posted a massive beat-and-raise Q3 on November 13, with sales up 38% and adjusted earnings at $0.64 a share vs. $0.05 in the prior-year quarter. MNDY’s number of paid customers with more than $50K in annual recurring revenue climbed 57% YoY.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

MNDY expects to post an operating margin of approximately 7% in 2023 as it improves its bottom line. The company’s consensus earnings estimate soared 61% for FY23 and 58% for next year since its Q3 release to help it land a Zacks Rank #1 (Strong Buy).

Monday.com’s recent upward earnings trends extended its stretch of impressive revisions over the last two years. The company is projected to post 40% revenue growth this year and 27% higher sales next year to climb from $519 million in FY22 to $920 million in FY24. It is also projected to swing from an adjusted loss of -$0.73 per share to +$1.48 and then reach $1.71 next year. MNDY has blown away our bottom line estimates over the last year.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Monday.com stock has climbed 60% over the last year to top the Zacks Tech sector’s 40%. The stock is trading above its 21-day and 50-day moving averages and is now closer to neutral RSI levels vs. overbought at the end of November. MNDY, which went public in the summer of 2021, trades 55% below its 2021 peaks and 16% below its average Zacks price target.  

Monday.com’s valuation levels are worrisome. However, it is improving its bottom line and remains committed to growth. Eleven of the 15 brokerage recommendations that Zacks has for Monday.com are “Strong Buys,” and its balance sheet appears fantastic.

Vertiv Holdings Co (VRT)

Vertiv operates in the background of the modern tech-driven economy, providing critical digital infrastructure and continuity solutions across data centers, communication networks, and beyond. Vertiv’s various products, services, and solutions include critical power, thermal management, monitoring & management, and more. VRT’s overall goal is to help keep its customers’ most critical technology running as smoothly as possible at all times.

Vertiv’s clients include enterprises, as well as small and medium-sized businesses across healthcare, retail, telecom, education, and beyond. Vertiv is also benefitting from the AI investment super cycle that might just be starting as companies are forced to roll out far more computing capacity that’s required for artificial intelligence.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The firm topped our Q3 estimates and boosted its guidance at the end of October, closing the quarter with a record $5 billion backlog. Vertiv’s surging earnings outlook for FY23, FY24, and FY25 EPS helps it earn a Zacks Rank #1 (Strong Buy).

Zacks estimates call for VRT’s revenue to climb 21% this year and 9% higher in 2024 to hit $7.50 billion. On the bottom line, its adjusted earnings are projected to soar by 228% and 27%, respectively—$0.53 in FY22 to $2.21 next year.

Nine of the 10 brokerage recommendations Zacks has for Vertiv are “Strong Buys.” Vertiv shares have outclimbed Nvidia (NVDA) over the last 12 months, up 241% vs. NVDA’s 180%. This includes a 17% pop in the past month vs. Tech’s 6%. VRT hit new highs on Friday.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

VRT found support at its 21-day moving average recently and it still trades 9% under its average Zacks price target. Alongside this huge growth comes impressive relative value. VRT trades 15% below the Zacks Tech sector and at an 18% discount to its highs at 20.7X forward 12-month earnings. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Vertiv Holdings Co. (VRT) : Free Stock Analysis Report

monday.com Ltd. (MNDY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Advertisement