Stocks nosedived on Jun 24, recording the worst session so far this month, as the United States reported a record number of fresh COVID-19 cases since April. This reignited fears in the minds of investors leading to huge a sell-off.
All three major indexes including the tech-heavy Nasdaq, which had hit a record 10,000 mark earlier this week, took a massive hit, with all major tech companies ending the day in the red. However, tech stocks have been driving the market rally since mid-March on increased dependency.
Being one of the least-affected sectors during the peak of the pandemic, it is likely that the tech rally will continue despite Wednesday’s plunge. This thus gives the perfect opportunity to those who missed the previous chance to invest their money in the tech space.
Stocks Suffer on Growing Fears of COVID-19
U.S. stocks nosedived on Jun 25 after the country reported a record 34,700 new COVID-19 cases as states start to reopen. This is the highest daily tally since the country reported 36,400 cases on Apr 9 and Apr 24. This once again raised jitters among investors, who rushed to sell off stocks anticipating fresh orders of lockdown.
The Dow shed over 710 points or 2.7%. The broader S&P 500 index tumbled 2.59%, with a decline in all 11 sectors. Energy fared the worst, while the tech-heavy Nasdaq fell 2.19% after hitting a record high earlier this month.
Shares of companies primed to benefit from the economy reopening faltered the most. United Airlines Holdings, Inc. UAL fell 8.3%. Delta Air Lines, Inc. DAL, American Airlines Group, Inc. AAL and Southwest Airlines Co LUV all slid over 7%. Airlines were especially hit by the quarantine orders issued by New York, New Jersey and Connecticut.
Tech Stocks Hit Hard
One of the unlikely casualties of Wednesday’s market plunge was the tech sector. The big five tech companies — Apple, Inc. AAPL, Alphabet, Inc. GOOGL, Facebook, Inc. FB, Amazon.com, Inc. AMZN and Netflix, Inc. NFLX — which were responsible for the market rally since Mar 16, all took a hit. Apple, Google and Facebook slipped 1.8%, 2.1% and 3.4%, respectively. Amazon declined 1.1%, while Netflix shed 1.8% and Microsoft Corporation MSFT declined 2%.
However, tech stocks have been driving the rally for quite some time. The coronavirus pandemic has seen an increasing number of people working and learning remotely, and shopping online. This has led to a shift in data and information, to technological and digital platforms in order to safely remain afloat.
So in spite of Thursday’s plunge, the Technology Select Sector SPDR’s (XLK) 11.6% year-to-date return is a testimony to the fact the tech rally is here to stay. We have shortlisted four lucrative tech stocks to buy now on the dip.
Zoom Video Communications, Inc’s ZM cloud-native unified communications platform, which combines video, audio, phone, screen sharing and chat functionalities, makes remote-working and collaboration easy.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 174.4% over the past 30 days. Zoom has a Zacks Rank #1 (Strong Buy).
Dropbox, Inc. DBX is a service company. It offers a platform which enables users to store and share files, photos, videos, songs and spreadsheets. Dropbox, Inc. is headquartered in San Francisco, CA.
The company’s expected earnings growth rate for the current year is 50%. The Zacks Consensus Estimate for current-year earnings has improved 7.1% over the past 60 days. Dropbox sports a Zacks Rank #1.
PTC, Inc. PTC offers a comprehensive portfolio of software solutions comprising computer-aided design modeling, product lifecycle management, data orchestration, and experience creation products.
The company’s expected earnings growth rate for the current year is 39.6%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. PTC holds a Zacks Rank #2 (Buy).
Logitech International S.A. LOGI is a global leader in peripherals for personal computers and other digital platforms It develops and markets innovative products in PC navigation, Internet communications, digital music, home-entertainment control, video security, interactive gaming and wireless devices.
The company’s expected earnings growth rate for the current year is 5.1%. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 60 days. Logitech has a Zacks Rank #1.
NVIDIA Corporation NVDA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high performance computing, gaming and virtual reality platforms.
The company’s expected earnings growth rate for the current year is 36.4%. The Zacks Consensus Estimate for current-year earnings has improved 3.8% over the past 60 days. NVIDIA holds a Zacks Rank #2.