Tech stocks are among the most exciting companies in the stock market. Not only are many of these companies generating substantial growth, but the stock can generate substantial earnings.
The stories told by management, the rapid progress of their products and services and their evolving businesses are amusing. This makes following up on these businesses alive and exciting. In addition, many of these companies manufacture products that we use as consumers, but in fact love.
As the stock market continues to hit new highs after new highs, not all stocks benefit from the same turn. Some are. But certainly not all. As we move forward into August and approach the last four months of the year, I want to take a closer look at tech stocks.
Specifically, I want to look at seven tech stocks to buy before the end of the year.
- Advanced micro-systems (NASDAQ:AMD)
- Pinterest (NYSE:PINS)
- Roku (NASDAQ:ROKU)
- Zoom video (NASDAQ:ZM)
- Selling power (NYSE:CRM)
- Wholesale trade Holdings (NASDAQ:BIGC)
- Amazon (NASDAQ:AMZN)
Tech stocks to buy until the end of the year: Advanced Micro Devices (AMD)
While not all tech stocks are reaching all-time highs, this one certainly is. Advanced Micro Devices recently exploded higher, rallying over 30% in six consecutive high-volume sessions after profits.
The interesting thing is that AMD stock first fell on earnings. I couldn’t believe it, not only because the quarter was so strong, but because the stock had consolidated for so long before that.
Not so long ago, I suggested that AMD should ultimately benefit from a great rally a little like Nvidia (NASDAQ:NVDA). Like AMD, NVDA was doing quite well but the title was stuck in a phase of consolidation. It then exploded higher on profits.
Now, with a little pep in its approach, I like that AMD is entering at the end of the year. The stock offers us an excellent opportunity to buy back. While there is always a possibility that AMD will underperform the market or be dragged into a market-wide correction, it looks like this could be the start of a new uptrend.
After a year of quiet price action, this one could finally reward patient bulls.
A share that does not reach new heights? Pinterest. This stock was completely buried on earnings, suffering an 18.2% drop in one day. Now down nearly 40% from its all-time high, stocks are closing in on May’s low.
My how things can take a big turn in just one quarter. It wasn’t that long ago that PINS stock was knocking on the door at $ 90 a share, inevitably putting $ 100 on the line if it hit that level. Now he’s trying to find his place in the $ 50.
The worst part is that Pinterest is doing quite well from a revenue and revenue standpoint. Its balance sheet is solid and its margins incredibly attractive. From a business standpoint, this is a great asset. However, there is one major problem: the users.
The company reported a drop in the number of monthly active users. When it comes to social media companies, investors apparently couldn’t care less about numbers and profit margins, as their primary focus is user growth and monetization.
Pinterest has a user problem and it could take a toll on the stock. It could be argued that the hot summer months combined with the easing of Covid-19 restrictions have hit just about every social media outlet. It’s true. But Pinterest has to prove itself here.
If you think this is just a one or two quarter problem, it might be worth getting into a high quality business that has lost between 40% and 50%.
Tech stocks: Roku (ROKU)
Roku is in a similar position to Pinterest, although it looks less serious when you look at the price action. Stocks recently hit a new all-time high, which is somewhat surprising considering the bear market we just saw in growth stocks in the second quarter.
In all respects, ROKU stock has done a good job of removing this selling pressure – although it has come back under pressure from earnings.
While the company crushed ratings across the board and provided solid advice, its users fell short of Street’s expectations as well. Again, with summer in full swing, with people going on trips and spending time with each other, we had to assume that video streaming platforms were going to go down, right? This is especially true given the year-over-year comparisons and how the world looks now compared to a year ago.
While active accounts rose 28% to 55.1 million, analysts were looking for “at least” 55.8 million. In addition, “streaming hours in the quarter increased 19% to 17.4 billion.” Personally, these numbers look pretty good to me (and the slight lack of the first number seems like a bad reason to sell a good business).
As we move into the second half of the year amid a resurgence in Covid cases and a backdrop of secular growth via the cord cut, Roku looks like it could be a winner.
Video zoom (ZM)
And if you want to talk about a game about growing Covid cases, look no further than Zoom Video. While this has found some uplift from its 2021 low, it is still far from highs. Specifically, ZM stock is still down around 40% from the highs reached in October.
Here’s an interesting observation about Zoom Video: The company was growing its revenue impressively, and its free cash flow was positive and profitable. before The Covid-19 was a global pandemic. He had a high valuation, but an absolutely amazing company. It was a really attractive business before all of this mess and it doesn’t seem like investors realize it. Obviously, the stock exploded once Covid was there, as it may be the best company for such a situation.
By all accounts, Covid cases are starting to climb again around the world. Despite this, Zoom Video is not gaining much ground. This may be a red flag for some investors, but it is probably an opportunity for others.
Stocks are far from highs even though business remains fairly strong, down around 42.5%. On the positive side, this allowed the valuation to drop significantly.
Technology stocks: Salesforce (CRM)
Why might Salesforce be set up for a second half? Because he has been sitting on the bench for so long, he should be very well rested!
From the end of August 2020, shares of CRM fell around 8% against a gain of 27% for the Nasdaq 100 Index. It is clear that the acquisition of Slack weighs a bit on the stock, as investors digest the acquisition.
Yet this type of underperformance is unwarranted. This is especially true with analysts calling for revenue growth of 22% this year and 20% next year. This is expected to continue for many years to come. I don’t know when Salesforce will eventually rally, I just know it probably will. Maybe this time is not so far away.
When you look at the long-term performance of Salesforce, its growth has been steady and impressive. I think that in the long term, this performance will return and the title will regain some momentum.
BigCommerce Holdings (BIGC)
Most investors are probably familiar with the stocks on this list. However, BigCommerce Holdings may not be known to everyone. Since its IPO a year ago, we’ve seen a lot of ups and downs in this one.
The company describes itself as a software-as-a-service (SaaS) e-commerce platform that “enables merchants of all sizes to create, innovate and grow their businesses online.” In other words, think Shopify (NYSE:STORE) or even ContextLogic (NASDAQ:TO WISH)… Only without the latter’s misfortunes.
After climbing higher, stocks fell sharply, falling nearly 40% just days after hitting their post-IPO high. But BIGC shares more than doubled soon after.
Since those days of high volatility, BigCommerce has settled into a calmer range, although it has resolved to new lows since the IPO. I think that’s a good thing, however. Falling prices gave investors a few more quarters to value the business, while still allowing valuation to kick in a bit. Now in the process of strengthening a little, it could enjoy a nice ride at the end of the year.
Analysts expect revenue growth of around 30% this year and 22.5% next year. If BigCommerce can deliver the goods, this stock could see a nice rally in the coming months.
Technology stocks: Amazon (AMZN)
Yes, the irony of following BigCommerce with BIG commerce does not escape me. However, as a stock, this one just doesn’t seem to find its place. Almost every other FAANG track has found some sort of groove, but not Amazon.
Interestingly, AMZN stock gave traders one of the sharpest breakouts I’ve seen in quite some time. Stocks exploded on long-term resistance as the stock continued to consolidate for most of the year.
The breakout happened just after Jeff Bezos relinquished the reins as CEO. But that post-Bezos pop didn’t last long. Once Amazon delivered a rare shortfall in revenue and disappointing forecasts, the stock quickly fell.
Now that I am finding buyers near key support, I wouldn’t be surprised if it eventually found its pace in Q4. We already know that Amazon will dominate the holidays and that its cloud business remains as strong as ever. There may be a few bumps along the way, but we’re only one stock away from seeing a major rally in this name.
As of the publication date, Bret Kenwell held a long position in AMD, PINS and ROKU. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
Bret Kenwell is the director and author of Futures Blue Chips and is on Twitter @BretKenwell.