Technology has been a driving force in the stock market in recent years, and 2020 is not going to be any different. The NASDAQ Composite, which tracks stocks on the tech-heavy index, is currently up 6.68% for the year.
American stocks have hit 2020 running, with strong growth over January and into this week. Despite some international economic slowdown expected from Coronavirus, investors are confident that fundamentals are strong.
Investors looking to take advantage of strong tech performance will find plenty of compelling stocks. The following are two of the best as we move deeper into the first quarter.
Lam Research Corporation (NASDAQ: LRCX)
Lam Research is a strong pick for the semiconductor industry. It develops and sells fabrication equipment and a range of tech services to manufacturers in the industry. When tech performs well, Lam sees gains within its own business.
In the previous fiscal quarter, revenue was up 2.4%, beating the average analyst targets. The next two quarters are expected to come in with year over year revenue growth of 15% and 27%. This will help to drive earnings, with per-share earnings expected to reach $20.12 in the 2021 fiscal year. For long-term investors, this stock has a lot of potential and the price is still relatively affordable today.
This is a stock to consider for any investor that wants a tech holding without making a bet on a specific semiconductor manufacturer. Because Lam has business relationships with most of the major players in the industry, it’s in the perfect position to ride the wave of high demand for tech products.
Power Integrations, Inc. – (NASDAQ: POWI)
Power Integrations is another viable pick, which also has vast exposure to the wider technology industry. It creates analog integrated circuits used for high-voltage power conversion. Technologies from this company have allowed for smaller, lighter, and more efficient power supplies in recent years. Integrated circuits developed by Power Integrations can be found in set-top boxes, home appliances, networking equipment, LED lighting systems, industrial electronics, computers, and more.
There’s strong momentum behind this stock. It has gained 55.81% in the last 12 months, compared to an average of 37% across the wider tech industry. Sales revenue grew by 23% in the previous quarter, and current full year earnings are expected to grow by the same percentage year over year.
Like Lam Research, Power Integrations is a strong pick because it can leverage the wider demand for hi-tech devices both in the industrial and consumer markets.
Technology Still an Area of Focus in 2020
With the right technology picks, it’s possible to build a robust portfolio that is primed for growth. The two stocks above are worth a closer look, especially considering the continued bullish activity across the wider NASDAQ index.
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