Over recent decades, the technology industry has advanced enormously. The sector has become indispensable for numerous industries, education, and modern life in general. The United States tech sector accounts for 35% of the total world market and is expected to reach a $1.6 trillion market value by the end of 2021.
According to Mark Haefele, chief investment officer at UBS Global Wealth Management, the global tech sector is set for earnings growth of around 15%. He added that “In our base case, we expect valuations to stabilize and for strong mid-teens earnings growth to be reflected in share prices over the next 12 months.”
Hence, we believe fundamentally strong tech stocks Intel Corporation (INTC), Veeva Systems Inc. (VEEV), and Qorvo, Inc. (QRVO), which are trading near their 52-week lows, could soar in price in the near term.
Intel Corporation (INTC)
INTC in Santa Clara, Calif., is a popular tech company that designs, manufactures, and sells computer products and technologies globally. The company operates through the segments of CCG; DCG; IOTG; Mobileye; NSG; PSG; and All Other.
On February 15, INTC agreed to acquire Tower Semiconductor Ltd. (TSEM) for $53 per share in cash. The acquisition is expected to significantly advance the company’s manufacturing capacity, global footprint, and technology portfolio.
On February 7, INTC’s Intel Foundry Services (IFS) launched Accelerator, a comprehensive ecosystem alliance designed to help foundry customers bring their silicon products smoothly from idea to implementation. The IFS Accelerator should help advance customer innovation and bolster the company’s foundry manufacturing platform.
For its fiscal fourth quarter, ended Dec. 25, 2021, INTC’s non-GAAP net revenue increased 3.5% year-over-year to $19.53 billion. For its fiscal year ended December 25, its non-GAAP net income and non-GAAP EPS came in at $22.36 billion and $5.47, respectively, up 3.5% and 7.3% from the prior year.
The $3.73 consensus EPS estimate for the fiscal year 2023 indicates a 5.4% year-over-year increase. And the $77.10 billion consensus revenue estimate for the same year reflects an improvement of 2.9% from the prior year. Furthermore, INTC has an impressive surprise earnings history; it has topped consensus EPS estimates in each of the trailing four quarters.
The stock has declined 23% in price over the past year and 7.6% year-to-date to close yesterday’s trading session at $47.58. It is currently trading 2.8% above its 52-week low of $46.30.
INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
INTC has an A Value grade and a Quality grade. In the 98-stock Semiconductor & Wireless Chip industry, it is ranked #18. The industry is rated A. Click here to see the additional POWR Ratings for INTC (Growth, Momentum, Stability, and Sentiment).
Click here to checkout our Semiconductor Industry Report for 2022
Veeva Systems Inc. (VEEV)
VEEV is a cloud-based software provider for the life sciences industries in North America, Asia-Pacific, the Middle East, Africa, and Latin America. The Pleasanton, Calif., company’s offerings include the Veeva Commercial Cloud, a suite of software, data, and analytics solutions.
On January 20, VEEV announced that the Lymphoma Academic Research Organization (LYSARC) had chosen the Veeva Development Cloud to improve lymphoma therapy research. And earlier, on December 14, the company announced that biotechnology company PharmaEssentia had adopted Veeva Data Cloud to support the launch of BESREMi, a new therapy for rare blood cancer. These developments should prove to be profitable for the company.
On December 13, VEEV acquired Veracity Logic, cloud software for randomization and trial supply management (RTSM) provider. Jim Reilly, vice president, Vault R&D, and Quality at VEEV, said, “This expands Veeva’s clinical offering with flexible and user-friendly RTSM capabilities.”
VEEV’s total revenues increased 26.1% year-over-year to $476.11 million in its fiscal third quarter, ended October 31. Its non-GAAP operating income rose 28.2% from the prior-year quarter to $199.45 million. And its non-GAAP net income and non-GAAP net income per share improved 26% and 24.4%, respectively, to $158.21 million and $0.97.
Analysts expect VEEV’s EPS to increase 12.8% year-over-year to $0.88 for its fiscal fourth quarter, ended Jan. 31, 2022. The Street expects revenue for the same quarter to rise 20% from the prior-year period to $476.23 million. In addition, VEEV has topped consensus EPS estimates in each of the trailing four quarters.
VEEV’s stock has declined 10.8% in price year-to-date but has gained 1.8% over the past month to close yesterday’s trading session at $227.93. It is currently trading 7.3% above its 52-week low of $212.49.
It is no surprise that VEEV has an overall B rating, which translates to Buy in our POWR Rating system.
VEEV has an A grade for Quality and a B grade for Growth and Sentiment. It is ranked #27 out of the 87 stocks in the Medical – Services industry. To see the additional POWR Ratings for Value, Momentum, and Stability for VEEV, click here.
Click here to checkout our Healthcare Sector Report for 2022
Qorvo, Inc. (QRVO)
QRVO develops and commercializes technologies and products for worldwide wireless and wired connectivity. The Greensboro, N.C. company operates through the two broad segments of Mobile Products: and Infrastructure and Defense Products.
On January 6, QRVO introduced its wideband Wi-Fi front-end module (FEM) covering the 5.1 GHz to 7.1 GHz bands for customer premises equipment (CPE). Tony Testa, QRVO director of Technical Marketing, said, “Qorvo’s newest FEM is optimized to operate over 5 GHz, 6 GHz or both, to maximize system capacity and throughput, which is not possible in existing CPE designs.”
On December 20, QRVO announced that it was supplying Ultra-Wideband (UWB) technology for Alphabet Inc. (GOOGL) Pixel 6 Pro flagship smartphone. With the collaboration with GOOGL, an industry leader, the company should expand its addressable market to include the Android smartphone ecosystem.
For its fiscal third quarter, ended Jan.1, 2022, QRVO’s revenue increased 1.7% year-over-year to $1.11 billion. Its net income improved 7.6% from the prior-year period to $216.26 million, while its net income per share came in at $1.95, up 12.1% from the same period the prior year.
The Street’s $2.94 EPS estimate for the quarter ending March 2022 reflects a 7.3% year-over-year rise. The Street’s $1.15 billion revenue estimate for the same period indicates a 7.2% increase from the prior-year quarter. In addition, QRVO has beaten consensus EPS estimates in each of the trailing four quarters.
Over the past month, the stock has declined 13.1% in price to close yesterday’s trading session at $129.31. It has gained 1.6% intraday. The stock is currently trading 4.3% above its 52-week low of $123.92.
QRVO’s promising prospects are reflected in its POWR Ratings. The stock has a Sentiment and Quality grade of B. It is ranked #48 in the Semiconductor & Wireless Chip industry.
In addition to the POWR rating grades we have stated above, one can see QRVO ratings for Growth, Value, Momentum, and Stability here.
Click here to checkout our Semiconductor Industry Report for 2022
INTC shares were trading at $48.06 per share on Tuesday afternoon, up $0.48 (+1.01%). Year-to-date, INTC has declined -5.97%, versus a -6.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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