The Zacks Analyst Blog Highlights Broadcom, Adobe, Analog Devices, Fortinet and Mettler-Toledo
For Immediate Release
Chicago, IL – April 4, 2023 – 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: Broadcom AVGO, Adobe ADBE, Analog Devices ADI, Fortinet FTNT and Mettler-Toledo MTD.
Here are highlights from Monday’s Analyst Blog:
Avoid the Cryptocurrency Downturn; Add These 5 Stocks Instead
The cryptocurrency market has been on a roller coaster ride for the past year, thanks to high volatility in the most popular digital currency — bitcoin (BTC) — which holds a dominant position in terms of market capital.
According to CoinGecko data, the global cryptocurrency market capital stands at $1.22 trillion as of today, reflecting a year-over-year fall of 46.7%. Bitcoin’s market cap stands at $544 billion, accounting for 44.7% of the total crypto market cap.
The sluggish performance of ProShares Bitcoin Strategy ETF (BITO) also reflects weakness in the crypto space. In the past year, BITO has lost 39.1%.
The massive decline in the major indexes of the U.S. equity market, which has been suffering from the Federal Reserve’s aggressive stance to cut down the inflation rate through continued interest rate hikes, remains the prime reason behind the topsy-turvy crypto market.
The Fed raised the benchmark interest rate again by 25 basis points to 4.75-5% in the March FOMC meeting. Chairman Jerome Powell said that the higher interest regime would continue for a longer period in his testimony before the U.S. Congress. Several Fed officials estimated that the terminal interest rate should be 5.375% or more at the end of 2023.
Apart from the interest rate hikes, the crash of the crypto exchange — FTX — is a significant reason behind the downturn in the crypto market.
Although some signs of improvement are visible from the latest rebound in BTC, rising interest rates and tighter monetary policy continue to ignite uncertainties in the crypto space.
Against this backdrop, we advise investors looking for good investment opportunities to park their money in high-quality tech stocks.
Technology Stocks’ Prospects
The growing proliferation of advanced technologies like AI, Machine Learning (ML), Internet of Things (IoT), blockchain and augmented reality/virtual reality (AR/VR) is constantly boosting the prospects of the technology sector.
The rapid adoption of cloud computing platforms is another positive. Rising 5G deployment, along with solid uptake of autonomous vehicles, cyber security solutions, wearables, voice assistants and other connected devices, are encouraging for the stocks offering products powered by the above-mentioned technologies.
Our Picks
Given the upbeat scenario, we have selected five technology stocks (market cap greater than $20 billion) that are well-poised to grow through the rest of 2023, as these are highly reputed, fundamentally strong and financially resilient.
Apart from having solid fundamentals, the stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Per Zacks’ proprietary methodology, stocks with such a favorable combination offer solid investment opportunities.
Broadcom is benefiting from strength in networking and server storage. Substantial content increases at cloud and enterprise customers, which are aiding its storage connectivity business, are other positives. Solid growth from the deployment of Tomahawk 4 for data center switching at hyper-scale customers is noteworthy.
Upgrades of edge and core routing networks with Broadcom’s next-generation Jericho portfolio at cloud and service providers are contributing well. The company’s growing prospects from its strategic deals are other tailwinds. Its VMware acquisition will likely boost prospects in the long run. Its tie-up with Tencent to accelerate the adoption of high bandwidth co-packaged optics network switches for cloud infrastructure is another positive.
AVGO currently has a Zacks Rank #2 and a Growth Score of B. It has a market capitalization of $267.47 billion. The Zacks Consensus Estimate for Broadcom’s fiscal 2023 earnings has improved 2.6% to $41.38 per share in the past 60 days.
Adobe is benefiting from strong demand for its creative products. Solid momentum across the company’s Creative Cloud, Document Cloud and Adobe Experience Cloud is a major positive. Growth in emerging markets, robust online video creation demand, strong Acrobat adoption and improving average revenue per user are other tailwinds.
The growing adoption of Premiere Pro, solid momentum across the Adobe Express platform, and benefits from the Frame.io acquisition are contributing well. Rising demand for professional service and the solid uptake of Adobe Experience Manager are other positives.
ADBE currently has a Zacks Rank #2 and a Growth Score of B. It has a market capitalization of $176.72 billion. The Zacks Consensus Estimate for Adobe’s fiscal 2023 earnings has improved 1.2% to $15.40 per share in the past 60 days.
Analog Devices is riding on a growing presence across communication, consumer, industrial and automotive end markets. Solid demand for high-performance analog and mixed-signal solutions remains a tailwind.
Strong momentum across the electric vehicle space on the back of robust Battery Management System solutions is a positive. Growing power design wins are other positives.
ADI currently has a Zacks Rank #2 and a Growth Score of B. It has a market capitalization of $99.76 billion. The Zacks Consensus Estimate for Analog Devices’ fiscal 2023 earnings has improved 9.2% to $10.60 per share in the past 60 days.
Fortinet has been benefiting from the rising demand for security and networking products amid the growing hybrid working trend. It has also been gaining from robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network offerings.
Increasing IT spending on cybersecurity is expected to help Fortinet grow faster than the security market. Its focus on enhancing the unified threat management portfolio through product development and acquisitions is another tailwind. Strong deal wins remain the company’s key growth drivers.
FTNT currently has a Zacks Rank #2 and a Growth Score of A. It has a market capitalization of $52.11 billion. The Zacks Consensus Estimate for Fortinet’s 2023 earnings has improved 4.4% to $1.41 per share in the past 60 days.
Mettler-Toledo is benefiting from the solid momentum across the Laboratory, Food Retail and Industrial segments. The company’s expanding presence across the pharmaceutical and life sciences markets is a major positive. MTD’s robust automated chemistry solutions, which are aiding its momentum across the drug process development field, are contributing well to its top-line growth.
In addition, the company’s portfolio strength, cost-cutting efforts, robust sales and marketing strategies, and margin and productivity initiatives are acting as tailwinds.
MTD currently has a Zacks Rank #2 and a Growth Score of A. It has a market capitalization of $33.77 billion. The Zacks Consensus Estimate for Mettler-Toledo’s 2023 earnings has improved 3.6% to $44.00 per share in the past 60 days.
Mettler-Toledo International, Inc. price-consensus-chart | Mettler-Toledo International, Inc. Quote
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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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Analog Devices, Inc. (ADI) : Free Stock Analysis Report
Adobe Inc. (ADBE) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
Mettler-Toledo International, Inc. (MTD) : Free Stock Analysis Report
