All three major U.S. indexes climbed in morning trading Friday on the back of some U.S.-China trade war positivity. This came after Chinese President Xi Jinping reportedly called for Beijing and Washington to improve communication, as the two sides try to reach a so-called phase one trade deal.
The S&P 500, Dow, and the Nasdaq all rest within 1% of their record highs that they reached earlier in the week. Despite the trade uncertainty, which has been the story for a long time, Wall Street has clearly been pleased enough with better-than-feared quarterly earnings results, solid U.S. jobs and consumer data, and a third Fed interest rate cut.
With this in mind, investors should take the time to look for a few growth-focused stocks. Now let’s dive into three tech stocks that we found with our Zacks Stock Screener that growth investors might want to consider buying right now as the stock market remains near its new highs…
Nvidia posted its fourth straight quarter of declining sales and earnings on November 14. The GPU powerhouse fell victim to the cyclical nature of the semiconductor industry and its own outsized success. Yet, NVDA shares are up 30% in the last three months and 60% in 2019—to outpace Micron (MU – Free Report) and Intel (INTC – Free Report) —as investors see the comeback on the horizon. Despite the climb, Nvidia stock still rests roughly 25% below its October 2018 highs, which could give the stock plenty of room to run.
NVDA’s fourth quarter fiscal 2020 revenue is projected to surge 34% to help lift adjusted earning by 107%, based on our Zacks estimates. Meanwhile, the firm’s adjusted full-year fiscal 2021 earnings are projected to jump 30% on the back of over 19% higher sales that would see it reach $12.86 billion.
Nvidia has seen its longer-term earnings revision picture trend heavily upward to help it earn a Zacks Rank #2 (Buy) at the moment. Nvidia also sports a “B” grade for Growth in our Style Scores system and its Semiconductor – General industry rests in the top 19% of our more than 250 Zacks industries. And the Santa Clara, California-headquarter firm is set to benefit from the long-term expansion of high-end gaming, as well as data centers, cloud computing, 5G, and artificial intelligence.
Zendesk is a software-as-a-service firm focused on customer service and engagement, offering an array of products and services. The company, which boasts roughly 150,000 paid customer accounts, posted stronger-than-projected top and bottom line results in late October. ZEN’s Q3 fiscal 2019 revenue surged 36%, while adjusted earnings jumped from $0.05 in the year-ago period to $0.12 per share—which crushed our estimate by 100%.
Zendesk has a $8.8 billion market cap, an average volume of over 2 million, a “B” grade for Growth, and is part of our Internet – Software industry that is currently in the top 35% of our 254 Zacks industries. Zendesk shares have surged 18% since the firm reported its results on October 29. The stock is now up 48% in the past 12 months and 250% in the last three years, which blows away its industry’s 47% climb. In spite of the climb, ZEN still rests roughly 15% off its 52-week highs.
The San Francisco-based firm’s adjusted Q4 earnings are projected to pop 10% on the back of 32.3% higher sales. The company’s full-year fiscal 2019 EPS figure is expected to soar 41% to $0.31 per share, with sales expected to pop 36% to reach $813.2 million. Peeking further ahead, ZEN’s fiscal 2020 sales are projected to climb another 30.5% to reach $1.06 billion, with earnings expected to skyrocket over 90% higher to $0.59 per share. ZEN’s strong earnings revisions help it hold a Zack Rank #1 (Strong Buy) and it looks poised to climb as part of the continued digital transformation of businesses around the globe.
The last stock on the list today is by far the most well-known, which might make some investors think its growth days are over. But Microsoft, under CEO Satya Nadella, who took over in February 2014, has seen its stock soar 213% in the past five years, after it moved mostly sideways for the better part of 15 years. MSFT stock has also climbed nearly 50% in 2019 to take its place in the $1 trillion market cap club alongside only Apple (AAPL – Free Report) .
Microsoft’s resurgence rests largely on its cloud computing expansion that now sees it compete directly against industry leader Amazon (AMZN – Free Report) . For example, Microsoft’s Q1 fiscal 2020 sales jumped 14% on the back of 27% expansion in its Intelligent Cloud unit. The Redmond, Washington-headquartered firm has also continued to innovate within Office, Windows, and devices, as it continues to make key acquisitions such as LinkedIn and GitHub.
Looking ahead, Microsoft’s sales are projected to pop 11% in both fiscal 2020 and 2021. Meanwhile, MSFT’s adjusted full-year EPS figures are expected to surge 12.3% in each of the next two years. MSFT, which consistently tops quarterly estimates, is a Zacks Rank #2 (Buy). The company is also part of an industry that rests in the top 17% right now. And Microsoft executives announced in September that the firm raised its quarterly dividend by 11% and approved a new share repurchase program.
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