The tech industry is one of the worst-performing sectors so far in 2022, with the benchmark Nasdaq 100 index down 12.3% year-to-date. As the Fed gears up to hike the benchmark interest rates in March, the sector is expected to retreat further. However…
certain fundamentally strong companies are expected to withstand the turbulence. Furthermore, with the rising demand for tech-related products in an increasingly remote life culture, demand will inexorably become inelastic due to the sector’s sheer necessity.
Several experts believe the sector’s slump to be temporary. With global digitization and multiple innovations, strong tech stocks with promising outlooks are on board for the long haul. According to ReportLinker, the global information technology market is set to grow at a 4.3% CAGR through 2026.
So, it could be wise to bet on quality tech stocks Microsoft Corporation (MSFT – Get Rating), Onto Innovation Inc. (ONTO – Get Rating), and Rambus Inc. (RMBS – Get Rating) to cash in on the industry’s long-term growth.
Microsoft Corporation (MSFT – Get Rating)
Technology giant MSFT’s broad product portfolio includes personal computers, tablets, gaming and entertainment consoles, and related accessories. In addition, the Redmond, Wash.-based company is making several advances in the cloud space with the help of Microsoft Azure.
On Jan. 25, 2022, Satya Nadella, chairman and CEO, MSFT, said, “As tech as a percentage of global GDP continues to increase, we are innovating and investing across diverse and growing markets, with a common underlying technology stack and an operating model that reinforces a common strategy, culture, and sense of purpose.”
MSFT’s total revenue came in at $51.73 billion for its fiscal 2022 second quarter, ended Dec. 31, 2021, up 20.1% year-over-year. The company’s net income came in at $18.77 billion, up 21.4% year-over-year. Also, its EPS increased 22.2% year-over-year to $2.48. Furthermore, its cash and cash equivalents were $20.60 billion for the period ended Dec. 31, 2021, compared to $14.22 billion for the period ended June 30, 2021.
For its fiscal 2022, analysts expect MSFT’s revenue to be $198.31 billion, representing an 18% year-over-year rise. In addition, the company’s EPS is expected to increase 15.8% year-over-year to $9.32 for fiscal 2022. Also, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 27.7% in price to close yesterday’s trading session at $296.71.
MSFT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an A grade for Sentiment and a B grade for Stability and Quality. Within the Software-Application industry, it is ranked #16 of 165 stocks. Click here to see the additional POWR Ratings for Growth, Value, and Momentum for MSFT.
Onto Innovation Inc. (ONTO – Get Rating)
ONTO designs, develops, manufactures, and supports process control tools that perform macro defect inspection and metrology, lithography systems, and process control analytical software worldwide.
On Nov. 4, 2021, Michael Plisinski, CEO, ONTO, said, “With several of our advanced nodes and specialty customers announcing expansions for next year and a record backlog that is more than twice the…
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