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The Zacks Analyst Blog Highlights: Apple, Adobe Systems, Intel, Xilinx and Maxim Integrated Products

Zacks Equity Research
The Zacks Analyst Blog Highlights: Northern Oil, Domtar, First Bancorp, Ameriprise and Callaway Golf

For Immediate Release

Chicago, IL – August 8, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Apple Inc AAPL, Adobe Systems Incorporated ADBE, Intel Corporation INTC, Xilinx, Inc. XLNX and Maxim Integrated Products, Inc. MXIM.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

5 Silicon Valley Stocks to Buy as Tech Juggernauts Roll On

Tech shares, which have had a tumultuous start to the month, started scaling north following strong quarterly results from Apple Inc among others. While computer and software makers are having a ball owing to the White House’s initiative to trim tax rates, high-end gaming, emergence of Internet-of-Things (IoT) and automation are driving demand for chips.

Tech’s Earnings Party On, Apple Hits $1 Trillion

As tech companies continue to dominate the equity market, total earnings for the sector are up 35% on 12.9% higher revenues in the second quarter, with 89.7% beating earnings estimates and 87.2% trumping revenue estimates.

Tech bellwether Apple, in the meantime, became the first U.S. company with a market cap of more than $1 trillion. And it’s only after the company reported strong earnings results for the quarter ended Jun 30. It’s earnings per share grew 40% year over year and revenues increased 17%. Growth in products including Apple Watch, AirPods, Beats headphones and iPhones helped the Cupertino-based company report stellar numbers. By the way, Apple’s guidance for the upcoming quarter is also above Wall Street predictions (read more: Apple Hit $1 Trillion: Growth In Asia & China Key Going Forward).

Catalysts Behind Earnings Growth

The Republican tax overhaul policy is providing the much-needed windfall to tech companies. The extra cash from tax cuts is helping tech companies pursue merger and acquisition activities. The prospect of a cut in personal taxation is also a major driving force for tech firms. With more cash in hand, investors have more room to invest. At the same time, IoT, which connects various devices to the cloud, is expected to be a huge growth driver for tech majors.

Chip makers, for now, are making giant strides as chips are in demand for some of the fastest growing tech industries in the world like e-sports and crypto mining. E-sports, a multiplayer video game for professional gamers, need thousands of semiconductor chips for production. These chips are an essential part of crypto mining as they provide the processing power needed for decoding blockchain algorithms.

Tech to Get Boost From Buybacks

The latest buzz in the stock market is buybacks. The Goldman Sachs Group, Inc. predicted that stock repurchases will reach $1 trillion this year, up 46% from last year. Buyback authorization, in fact, is expected to surge this month. Goldman added that August typically accounts for 13% of such deals for the year.

And tech accounts for the largest share of such buybacks. In the second quarter itself, share repurchases are up 57% from the same period a year earlier, while buybacks in the tech sector surged 130% year over year, per Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Thus, tech stocks are poised to be the biggest beneficiaries of the $1 trillion-buyback bonanza, given many of them are yet to conclude their existing repurchase programs.

5 Solid Picks

Investors, thus, should double down on the hottest tech stocks as they continue to scale higher on buybacks, favorable government policies and earnings strength. We have selected five such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Apple manufactures, and markets mobile communication and media devices, and personal computers. Currently, the company has a Zacks Rank #2. In the last 60 days, 10 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 2.5% in the same period. The stock’s expected earnings growth rate for the current quarter and year are 32.9% and 26.8%, respectively. The company has outperformed the broader industry in the past year (+30.6% vs +22.8%).

Adobe Systems Incorporated operates as a diversified software company. The company currently has a Zacks Rank #1. In the last 60 days, 11 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings advanced 3.9% in the same period. The stock’s expected earnings growth rate for the current quarter and year are 52.7% and 54.1%, respectively. The company has outperformed the broader industry in the last one-year period (+71.9% vs +21%).

Intel Corporation manufactures, and sells computer, networking, data storage, and communication platforms. Currently, the company has a Zacks Rank #1. In the last 60 days, 15 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 7.8% in the same period. The stock’s expected earnings growth rate for the current quarter and year are 13.9% and 19.4%, respectively. The company has outperformed the broader industry in the past year (+35.4% vs +25.9%). You can see the complete list of today’s Zacks #1 Rank stocks here.

Xilinx, Inc. designs and develops programmable devices and associated technologies. Currently, the company has a Zacks Rank #2. In the last 60 days, nine earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings increased 2.8% in the same period. The stock’s expected earnings growth rate for the current quarter and year are 15.4% and 5.3%, respectively. The company has outperformed the broader industry in the year-to-date period (+8.5% vs +8%).

Maxim Integrated Products, Inc. designs, develops, manufactures, and markets a range of linear and mixed-signal integrated circuits. Currently, the company has a Zacks Rank #1. In the last 60 days, 11 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 7.2% in the same period. The stock’s expected earnings growth rate for the current quarter and year are 25% and 14.8%, respectively. The company has outperformed the broader industry in the last one-year period (+39% vs +25.8%).

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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