The technology market has been combating deterrents like the U.S.-China trade dispute, Brexit impasse and other geopolitical concerns through 2019.
Now, as we gear up to ring in the New Year, investors might want to zero in on tech stocks that have solid potential for a healthy ROI in 2020. But before that, let’s take a look at the prospects for the tech sector in 2020.
Technology Sector Prospects Strong
The United States and China have reached an agreement regarding phase 1 of the trade deal. The United States has agreed to ease tariffs for certain exports from China. Although the nations are yet to sign the agreement, talks regarding the same are signal positivity in the market.
Per recent developments, the United States will reduce tariff burden on certain agricultural, manufactured and energy products. Also, the United States has affirmed that it will implement new policies pertaining to intellectual property, currency and forced technology transfers.
As quite a few technology bigwigs in the United States depend on China for manufacturing and sales, the deal to ease tariff pressure will provide a boost to many technology players.
Moreover, the global chip and semiconductor market is expected to recover in 2020. The World Semiconductor Trade Statistics indicated that the global chip market is set to recover by 5.9% in 2020, after an estimated 12.8% decline this year. Improved trade ties between the United States and China are likely to help meet the target more efficiently.
Also, technical advancement in the telecommunication sector on accelerated deployment of 5G technology and strong efforts toward modification in Internet infrastructure should act as tailwinds. In addition to these, rapid adoption of cloud computing, AI and ML tools, IoT, ADAS, smart speakers, virtual assistants, wearables, drones, VR/AR devices and blockchain should aid tech stocks to deliver a strong performance in 2020.
Time to Buy Tech Momentum Stocks
Let us focus on a few tech stocks that have gained momentum in 2019 and are expected to continue the trend on the back of the phase-one trade deal and recovery in the chip market.
However, picking the right momentum tech stocks is no mean feat for even the most seasoned investors, let alone new ones, who are planning to enter the uncharted world of jam-packed trades. With our Style Score System, we have singled out tech stocks that can help you beat the market. The Zacks Momentum Style Score indicates the best timing to pick a stock and gain advantage from its momentum.
Our research shows that stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2 (Buy), offer the best upside potential in the short term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Year-to-Date Price Performance
We have listed below five tech stocks having a Zacks Rank #1 or 2, Momentum Score of A and a market capitalization of more than $500 million.
Based in Santa Rosa, CA, Keysight Technologies Inc. (KEYS) is a provider of electronic design and test instrumentation systems.
Zacks Rank #1
Market cap of $19 billion
The Zacks Consensus Estimate for 2020 earnings has increased 7.4% over the past 60 days to $5.69 per share.
Qualys, Inc. (QLYS) is a provider of cloud-based security and compliance solutions across the globe.
Zacks Rank #1
Market cap of $3.3 billion
The Zacks Consensus Estimate for 2020 earnings has increased 11.2% over the past 60 days to $2.49 per share.
Liberty Lake, WA-based Itron (ITRI) is a global supplier of a wide range of standard, advanced and smart meters, as well as meter communication systems.
Zacks Rank #2
Market cap of $3.35 billion
The Zacks Consensus Estimate for 2020 earnings has moved 1.7% north to $3.61 per share over the past 60 days.
Based in Neenah, Plexus Corp. (PLXS) is a leading provider of electronic contract manufacturing services to original equipment manufacturers (OEM).
Zacks Rank #2
Market cap of $2.31 billion
The Zacks Consensus Estimate for 2020 earnings has increased 0.7% over the past 60 daysto $4.59 per share.
Livermore, CA-based FormFactor, Inc. (FORM) is an OEM of automated wafer probe cards used in the back-end portion of the semiconductor manufacturing process.
Zacks Rank #2
Market cap of $2 billion
The Zacks Consensus Estimate for 2020 earnings has increased 11.2% over the past 60 daysto $1.09 per share.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>
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Qualys, Inc. (QLYS) : Free Stock Analysis Report
FormFactor, Inc. (FORM) : Free Stock Analysis Report
Keysight Technologies Inc. (KEYS) : Free Stock Analysis Report
Itron, Inc. (ITRI) : Free Stock Analysis Report
Plexus Corp. (PLXS) : Free Stock Analysis Report
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