The Zacks Analyst Blog Highlights Meta Platforms, Fortinet, Manhattan Associates, NVIDIA and CrowdStrike Holdings
For Immediate Release
Chicago, IL – May 11, 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: Meta Platforms Inc. META, Fortinet Inc. FTNT, Manhattan Associates Inc. MANH, NVIDIA Corp. NVDA and CrowdStrike Holdings Inc. CRWD.
Here are highlights from Wednesday’s Analyst Blog:
5 Must-Buy Nasdaq-Listed Tech Stocks to Tap the Rally
Wall Street was range-bound in the past month as market participants remained indecisive regarding U.S. economic growth and interest rate trajectory. In its recently concluded May FOMC meeting, the Fed raised the benchmark interest rate by 25 basis points to the range of 5-5.25%, marking the highest Fed Fund rate since August 2007.
In first-quarter 2023, U.S. GDP growth rate came in at a moderate 1.1% compared with the consensus estimate of 2% and the fourth-quarter 2022 growth rate of 2.6%. Moreover, the Conference Board's Leading Economic Index, a gauge of future economic activity, dropped to 108.4 in March from February's revised reading of 109.7, its 12th successive monthly drop and the lowest reading since November 2020.
Precipitous contraction in ISM manufacturing and services activities, a decline in orders of durable goods, a reduction in construction activities, and a freight recession are all signaling a recession later this year. Fed Chair also acknowledged that the current banking turmoil in the United States has led to tighter credit conditions, and may impact economic activities.
Despite the above-mentioned headwinds, the tech-heavy has maintained its northbound journey since the beginning of 2023. Year to date, the Nasdaq Composite has rallied 16.4%. The Dow and the S&P 500 have gained 1.3% and 7.3%, respectively, in the same period.
Nasdaq Composite's performance is primarily linked to the movement of interest rate. The performance of growth stocks like technology is inversely related to the interest rate trajectory. The Nasdaq Composite was the best performer in the pandemic-ridden 2020 and 2021 as the Fed kept the benchmark interest rate to almost zero.
Just the opposite happened in 2022 as the central bank hiked the lending rate by a massive 4.5% to combat record-high inflation. The valuation of most of the technology behemoths plunged last year.
The situation once again turned in favor of the Nasdaq Composite as Fed Chairman Jerome Powell indicated that the ongoing rate hike cycle is perhaps reaching its end, although it will depend on the outcome of economic data.
Our Top Picks
We have narrowed our search to five Nasdaq Composite listed technology stocks that have rallied more than 20% year to date. These stocks have strong potential for 2023 and have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Meta Platforms Inc. is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. META is considered to have pioneered the concept of social networking.
However, as developed regions mature, Meta Platforms has taken measures to drive penetration in emerging markets of South East Asia, Latin America and Africa. Of all places, India deserves a-special mention in terms of user growth. The world's second-largest populated country offers tremendous potential for META. With China off the radar, India can prove to be a terrific growth engine for Meta.
Zacks Rank #1 Meta Platform has an expected revenue and earnings growth rate of 8.6% and 19.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.6% over the last 30 days. The stock price of META has jumped 94% year to date.
Fortinet Inc. is benefiting from rising demand for security and networking products amid the coronavirus crisis as a huge global workforce is working remotely. FTNT is also benefiting from robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network offerings.
Moreover, continued deal wins, especially those of high value, are solid drivers. Higher IT spending on cybersecurity is expected to aid Fortinet in growing faster than the security market. Also, focus on enhancing its unified threat management portfolio through product development and acquisitions is a tailwind for FTNT.
Zacks Rank #1 Fortinet has an expected revenue and earnings growth rate of 23.1% and 19.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last seven days. The stock price of FTNT has appreciated 36.9% year to date.
Manhattan Associates Inc. is the global leader in providing supply-chain execution and optimization solutions. MANH develops, sells, deploys, services, and maintains software solutions to manage supply chains, inventory, and omni-channel operations.
MANH offers Manhattan SCALE, a portfolio of logistics execution solutions that provide trading partner management, yard management, optimization, warehouse management, and transportation execution services. MANH also offers and Manhattan Active, a set of enterprise and omnichannel solution, which include enterprise solutions and omnichannel solutions for stores. In addition, MANH also provides inventory optimization, planning, and allocation solutions.
Zacks Rank #1 Manhattan Associates has an expected revenue and earnings growth rate of 12.1% and 4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.3% over the last 30 days. The stock price of MANH has climbed 39.2% year to date.
NVIDIA Corp. is gaining from the strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. A surge in Hyperscale demand and a solid uptake of artificial intelligence-based smart cockpit infotainment solutions are acting as tailwinds for NVDA.
Collaboration with Mercedes-Benz and Audi is likely to advance NVDA's presence in autonomous vehicles and other automotive electronics space. We expect its Automotive segment's revenues to witness a CAGR of 29% through fiscal 2023-2025.
Zacks Rank #2 NVIDIA has an expected revenue and earnings growth rate of 10% and 34.7%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days. The stock price of NVDA has soared 95.5% year to date.
CrowdStrike Holdings Inc. is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches and the increasing necessity for security and networking products amid the growing hybrid working trend. Continued digital transformation and cloud-migration strategies adopted by organizations are key growth drivers.
CRWD's portfolio strength, mainly the Falcon platform's 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth for CRWD.
Zacks Rank #2 CrowdStrike has an expected revenue and earnings growth rate of 33.8% and 49.4%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 30 days. The stock price of NVDA has advanced 23.5% year to date.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
Manhattan Associates, Inc. (MANH) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
