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5 Top-Ranked Recession Resistant Tech Bets to Grab

Madhura Bhattacharyya

The global economy has landed in troubled waters sending warning signs across the market. Escalating market volatility due to the US-China trade war, uncertainty over Brexit, debt crisis in China, contraction in the German and other economies plus geopolitical turmoil have induced a massive uproar in the global financial market.

Moreover, the recent attack on Saudi oil plants couldn’t have come at a better time. The strike caused a sharp spike in oil prices, which if persisted, will be detrimental to the global economy.

Rumors of recession to hit in the next 12 months have spread widespread fear in the market. Notably, per a latest Bank of America Merrill Lynch survey as reported by CNBC, 38% of investors polled in September fears that an economic downturn might crash the market in a year’s time compared to 34% in August.

Further, a new survey by the Duke University Fuqua School of Business reveals that 53% of CFOs believe that the United States will face an economic depression within a year.

However, the U.S. economy, which witnessed cycles of recession and expansions, is currently at its record-breaking 11th year of expansion, marking the longest US economic boom in history.

Further, to sustain the upswing in economy, the US Federal Reserve recently cut interest rates for the second time this year.  Following the rate cut, the yield curve, which got inverted in August sending recessionary alarm bells, has reversed.

Moreover, while consumer and labor markets retained stability for several months, a rebound in manufacturing and other industrial segments of the U.S. economy in August and September is likely to subside recessionary concerns.

Technology Sector: A Safe Bet

Technology has been one of the most bankable sectors for investors despite the volatility in the market. Given the robust growth opportunities and the involvement of technology in every sphere of life, the sector can outperform the market even when the economy is in shambles.

Notably, rapid adoption of AI, cloud computing, IoT, autonomous vehicles and wearables has been fueling growth for the sector. Moreover, increasing video streaming, buoyant demand for smart speakers and connected devices powered by AI plus machine and deep learnings are key catalysts.

Additionally, the accelerated deployment of 5G technology and expedited growth in robotics set the stage for more development.

Notably, the Technology Select Sector SPDR ETF (XLK) has surged 31.1% on a year-to-date basis compared with the S&P 500 Index’s rally of roughly 18.5%.

Key Picks

With the help of the Zacks Stock Screener, we selected five tech companies that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a VGM Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that stocks with an impressive VGM Score of A or B when combined with a top Zacks Rank of 1 or 2 offer the best upside potential.

To streamline our search further, we picked stocks with a market cap exceeding $5 billion and also having outshined the S&P 500 Index on a year-to-date basis.

The chart below shows the price performance of five best bets so far this year.



Logitech LOGI designs, manufactures and markets innovative peripherals that provide people with easy access to the digital world. This Zacks #2 Ranked stock with a market cap of $6.95 billion has a VGM score of B. The Zacks Consensus Estimate of $2.18 for fiscal 2020 earnings has been steady over the past 30 days.

Shares of the company have jumped 32.6% year to date.

CDW Corporation CDW is a leading provider of integrated information technology solutions to small, medium and large business besides government, education and healthcare customers in the United States, the United Kingdom and Canada. The stock with a market cap of $17.4 billion has a Zacks Rank #2 and a favorable VGM score of B. The Zacks Consensus Estimate of $5.86 for 2019 earnings has been intact over the past 30 days.

Shares of the company have gained 48.5% year to date.

Vipshop Holdings Limited VIPS is a China-based online discount retailer, which sells popular branded products, such as clothing from the likes of Nike and more regional-specific brands to cosmetics and much more. This Zacks #2 Ranked player with a market cap of $6.35 billion has an attractive VGM score of A. The Zacks Consensus Estimate of 81 cents for 2019 earnings has been maintained over the past 30 days.

Shares of the company have increased 75.2% year to date.

Micron MU is one of the leading worldwide providers of semiconductor memory solutions. This stock with a market cap of $56.1 billion has a Zacks Rank of 2 and a VGM score of B. The Zacks Consensus Estimate of $6.24 for fiscal 2020 earnings has been revised a couple of cents upward over the past 30 days.

Shares of the company have risen 59% year to date.

T-Mobile TMUS is a national provider of mobile communications services. This Zacks #2 Ranked stock with a market cap of $68.5 billion has a VGM score of A. The Zacks Consensus Estimate of $4.06 for 2019 earnings has been inched 0.7% up over the past 30 days.

Shares of the company have rallied 25.9% year to date.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.