The S&P 500 and the Nasdaq both touched brand new highs Monday after Chinese officials reportedly called for Beijing to speed up the introduction of penalties and punitive action regarding intellectual property theft and more. Tech giants such as Intel INTC and Cisco CSCO helped lead Monday’s charge.
The positivity comes after Chinese President Xi Jinping last week called for Beijing and Washington to improve communication as the two sides try to reach the so-called phase one trade deal. On top of that, Wall Street has been pleased with better-than-feared corporate earnings results, solid U.S. jobs and consumer data, and a third Fed interest rate cut.
However, U.S.-China trade uncertainty clearly remains, amid a slowing global economic backdrop. Therefore, now might be a good time to add a few more blue-chip stocks from a growth industry to your portfolio.
With this in mind, we searched utilizing our Zacks Stock Screener for blue-chip stocks from the broader tech industry that investors might want to consider buying right now…
Verizon might not be a super trendy tech name but the wireless communication powerhouse continues to play a vital role in the connectivity and digitalization of the U.S. economy. Verizon, like rivals such as AT&T T, is in the midst of its 5G roll out. Along with its focus on the next-generation of wireless communication, VZ, under CEO Hans Vestberg—who took over last summer—has focused on cost cutting.
VZ beat our Q3 top and bottom line estimates a month ago. Looking ahead, Verizon’s adjusted fiscal 2019 earnings are projected to pop 2.6% on 0.53% stronger sales, based on our current Zacks estimates. Better still, Verizon is expected to see its fiscal 2020 revenue climb 1.3% higher than our current-year estimate, with earnings projected to pop another 2.6%. VZ has also seen its earnings estimate revision activity trend heavily upward recently to help the stock earn a Zacks Rank #2 (Buy).
Verizon also sports a “B” grade for Growth and an “A” for Value in our Style Scores system. VZ is trading at 12.1X forward 12-month Zacks earnings estimates, which marks a discount against its industry’s 12.5X average and its own two-year high of 14.2X. On top of that, Verizon’s dividend yield rests at 4.12%, which doubles the 10-year U.S. Treasury’s current payout. And VZ shares are up 16% in the past three years, against its industry’s—which currently rests in the top 30% of our more than 250 Zacks industries—3% average decline and AT&T’s 6% downturn.
Nvidia shares hit a brand new 52-week high Monday, up 5%. NVDA stock has now jumped 34% in the last three months and 67% in 2019. Despite the climb, which easily tops the Electronic-Semiconductors market's 32% average, NVDA stock sits roughly 20% below its October 2018 highs as it prepares to return to growth.
The Santa Clara, California-based firm posted its fourth straight quarter of declining revenue and earnings earlier this month. Nvidia, which is a GPU giant, got hit by the cyclical nature of the chip market and fell victim to its own growth. Going forward, Nvidia is expected to continue to benefit from the growth of high-end video gaming, data centers, and more. “We extended our reach beyond the cloud, to the edge, where GPU-accelerated 5G, AI and IoT will revolutionize the world’s largest industries,” CEO Jensen Huang said in prepared third quarter remarks.
Moving on, NVDA’s Q4 fiscal 2020 revenue is projected to jump 34% to help lift adjusted earnings by 107%. Peeking further down the road, the company’s full-year fiscal 2021 EPS figure is projected to jump 30% above our current-year estimate on the back of 19.4% higher sales. NVDA’s current-year and fiscal 2021 consensus earnings have turned far more positive recently, which helps it hold a Zacks Rank #2 (Buy). Nvidia is part of the Semiconductor – General space that rests in the top 19% of our 254 industries, and NVDA also pays a dividend.
Microsoft stock, like Nvidia, touched a brand new 52-week high and is now up 50% in 2019 and over 12% since it reported blowout financial results on October 23. MSFT shares have also easily outpaced all of the FAANG stocks over the past two years, up 80% against second-place Netflix’s NFLX 62% jump. Microsoft is one of only two publicly traded companies in the world that boasts a $1 trillion market cap, alongside Apple AAPL.
The historic tech firm, under CEO Satya Nadella—who took over in February 2014—expanded beyond Office and Windows to become a cloud computing giant nearly on par with industry standard-bearer Amazon AMZN. Along with its cloud success, MSFT has remained innovative within its legacy businesses as it continues to expand through acquisitions.
MSFT’s revenue is expected to surge 11% in both fiscal 2020 and 2021, while its adjusted earnings are projected to climb over 12% both years. Microsoft stock currently holds a Zacks Rank #2 (Buy) and an “A” grade for Momentum. Plus, Microsoft announced in September that it raised its quarterly dividend by 11% and approved a new share repurchase program.
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Click to get this free report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Verizon Communications Inc. (VZ) : Free Stock Analysis Report AT&T Inc. (T) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Intel Corporation (INTC) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research