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4 Tech Stocks Worth Picking Amid Rising Coronavirus Cases

Zacks

The stock-market rally came to a halt last Friday as the heightening number of coronavirus cases is triggering fears of a second wave of the coronavirus outbreak. The Dow Jones, the Nasdaq, and the S&P 500 index depreciated 2.6%, 2.8%, and 2.4%, respectively, on Jun 26.

Notably, new cases in the United States have been breaking records daily for the last five days. In the last two days, more than 40,000 daily fresh cases have been reported.

A surge in coronavirus infections across several states of the nation has only highlighted the risks of reopening economic activities. Therefore, several governors are rethinking to halt the reopening of their states. Texas and Florida have already issued restrictions on bars to curb the spread of the virus.

A spike in coronavirus cases can offset the growing hopes for a quick economic recovery, and hence, the stock market will likely crash. Amid such concerns, stock investment would be a risky bet.


However, there are several companies in the tech space which have been resilient to the pandemic or have even benefited from the crisis. Amid the coronavirus-led uncertainties in the market, select stocks from the space will continue to perform well.

What Makes the Tech Sector More Resilient?

The Technology Select Sector SPDR XLK, which tracks an index of the S&P 500 technology stocks, has rallied 10.8% so far this year. The ETF has outperformed the gains of all three major U.S. indices. The Nasdaq has gained 8.7% year to date, while the Dow Jones and the S&P 500 have lost 12.3% and 6.9%, respectively.

The coronavirus outbreak has, surprisingly, opened up newer avenues of growth for tech companies. The social-distancing trend is fueling demand for PCs, notebooks and peripheral accessories, as more and more workers and students are now working and learning from home.

The work-and-learn-from-home necessity is also stoking demand for cloud storage. Furthermore, the lockdown has bolstered the usage of online and e-commerce services globally. Therefore, data-center operators are enhancing their capacities to accommodate the demand spike for cloud services.

Additionally, the sector’s resiliency can be attributed to the impressive long-term growth prospects of tech companies. Rapid adoption of cloud computing, along with the ongoing integration of AI and machine learning, has been a major growth driver.

The accelerated deployment of 5G technology, blockchain, IoT, autonomous vehicles, AR/VR and wearables offer significant growth opportunities.

Considering the healthy growth prospects of tech companies, it makes sense to invest in this space for long-term gains.

Choosing the Stocks

It is difficult to pick the right stocks from a wide range of available investment opportunities.

This is where the Zacks Stock Screener comes in handy. With the help of this screener, we have filtered four stocks that are incredible for investment right now. These stocks carry a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Also, the stocks have a Growth Score of A or B. Per Zacks’ proprietary methodology, stocks with such favorable combinations offer solid investment opportunities.

4 Prominent Picks

You may invest in Chegg, Inc. CHGG which provides social education platform. As education institutes shift their focus to online learning, the firm is benefiting from the adoption of Chegg Services that allow students to find human help on its learning platform through a network of live tutors.

Strength in digital products and services, such as Chegg Study, Chegg Writing and Chegg Tutors, holds promise.

Chegg currently sports a Zacks Rank of 1 and has a Growth Score of A. The Zacks Consensus Estimate for its 2020 earnings has moved up 15.2% to $1.21 per share in the past 60 days. Shares of the company have soared 72.6%, year to date.

Chegg, Inc. Price and Consensus

Chegg, Inc. Price and Consensus

Chegg, Inc. price-consensus-chart | Chegg, Inc. Quote

We also suggest investing in Zoom Video Communications ZM, which is riding on the coronavirus-induced work-from-home and online-learning trend. Moreover, the company’s efforts to eliminate the security and privacy loopholes like “zoombombing” are expected to help maintain its existing enterprise user base as well as attract more customers.

Zoom Video currently flaunts a Zacks Rank of 1 and has a Growth Score of A. The Zacks Consensus Estimate for its fiscal 2021 earnings has moved 174% north to $1.18 per share in the past 30 days. The stock has soared 277.4% so far in the year.

Investors can count on Fortinet, Inc. FTNT too, which provides network security appliances and Unified Threat Management (UTM) network security solutions to enterprises, service providers and government entities worldwide.

The company is benefiting from its dominance in the UTM space, which is one of the fastest-evolving segments in the network security space. Moreover, this Zacks Rank #1 company is gaining from the heightening cyber-attack risks that are spurring demand for its FortiMail platform.

Fortinet has a Growth Score of B. The consensus mark for its current-year earnings moved up 4 cents to $2.81 per share in the past 30 days. Shares of the company have appreciated 26% year to date.

Fortinet, Inc. Price and EPS Surprise

Fortinet, Inc. Price and EPS Surprise

Fortinet, Inc. price-eps-surprise | Fortinet, Inc. Quote

Atlassian Plc TEAM, a global leader and innovator in the enterprise collaboration and workflow software space, is also worth betting on. The company is gaining from the rising demand for remote working tools amid the coronavirus-led global lockdown.

Atlassian is poised to grow on the massive digitalization of work in organizations, big or small. Apart from this, integration with leading applications like Slack, Dropbox, and Adobe, along with partnerships with the likes of Amazon’s AWS and Microsoft, will likely expand the Atlassian paying user base.

This Zacks #2 Ranked stock has a Growth Score of A. The consensus mark for its ongoing-year earnings moved up a penny to $1.09 per share in the past 60 days. The stock has gained 50.4% so far in the year.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


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