Concerns over the Federal Reserve’s prospective interest rate hikes this year, multi-decade high inflation, and ongoing supply chain issues culminated with a market sell-off last month. The interest rate-sensitive Nasdaq Composite even entered correction territory. However…
a strong economic outlook for this year and a continuing surge in demand for tech products and solutions should drive the tech industry’s growth.
Increased funding for the technology sector should enable prominent large-cap tech companies to grow substantially. Furthermore, an easing of the semiconductor chip shortage should drive the industry’s long-term growth prospects. Investors’ interest in large-cap tech stocks is evidenced by the Technology Select Sector SPDR ETF’s (XLK) 3.3% returns over the past six months versus the SPDR S&P 500 Trust ETF’s (SPY) 1.2% gains. U.S. tech spending is expected to exceed $1.8 trillion in 2022.
VMware, Inc. (VMW – Get Rating), Telefonaktiebolaget LM Ericsson (publ) (ERIC – Get Rating), Corning Incorporated (GLW – Get Rating), Fair Isaac Corporation (FICO – Get Rating), and Citrix Systems, Inc. (CTXS – Get Rating) were the best performing tech stocks last month. So, we think it could be wise to add these stocks to one’s watchlist.
With $54.98 billion in market capitalization, VMW in Palo Alto, Calif., develops and applies virtualization technologies with x86 server-based computing, separating application software from the underlying hardware. The company’s products and technology solutions include multi-cloud, virtual cloud networking, digital workspace, application modernization, and intrinsic security solutions. It sells its products through distributors, resellers, system vendors, and systems integrators.
On Jan. 20, 2022, VMW announced an agreement with BT Group plc, a British multinational telecommunications provider, to help customers accelerate their digital transformation by providing more secure, flexible, and reliable access to cloud-based applications and services deployed in public and private clouds, SaaS, or at the enterprise edge. Combining BT’s extensive networking capabilities and in-depth security expertise with VMware technology will help BT offer VMware Secure Access Service Edge (SASE) as a global managed service to its customers. This should nurture a long-term partnership between both companies.
For its fiscal 2022 third quarter, ended Oct.29, 2021, VMW’s total revenues increased 11.3% year-over-year to $3.19 billion. The company’s non-GAAP operating income came in at $935 million, representing a 5.3% increase from the prior-year period. Its non-GAAP net income came in at $725 million for the quarter, up 3% from the year-ago period. And VMW’s non-GAAP EPS increased 3.6% year-over-year to $1.72. The company had $12.50 billion in cash and cash equivalents as of Oct. 29, 2021.
Analysts expect the company’s EPS to remain unchanged from the prior-year period at $7.20 for its fiscal year 2022 ended Jan. 31, 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $12.88 billion consensus revenue estimate for the same fiscal year represents a 9.45 rise from the prior-year period. VMW’s EPS is expected to grow at a 5.2% rate per annum over the next five years.
The stock has gained 9.6% in price over the last month and closed yesterday’s trading session at $129.97.
With a market capitalization of $41.68 billion, ERIC is a Stockholm, Sweden-based company that provides telecommunication equipment and related services. The company operates through four segments—Networks, Digital Services, Managed Services, Emerging Business, and Others. It offers its products and services to mobile and fixed network operators and…
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