4 Top-Ranked Blue Chip Tech Stocks to Add to Your Portfolio

The coronavirus outbreak has had a deep impact on various sectors. The technology sector, benefiting from rapid digital transformation and other growth avenues, has been more resilient than other sectors.

Since April, the Technology Select Sector SPDR (XLK) — which tracks an index of the S&P 500 technology stocks — has rallied 26.8%.

Oppotunities Galore for Tech Stocks

For the tech companies, the pandemic has definitely opened up newer avenues of growth. The social distancing norms have compelled people to stay at homes, binge on online content, and work as well as learn from home.

The work-and-learn-from-home necessity has stoked demand for cloud storage. The cloud is helping organizations remotely process a lot of information, build and run crucial applications and services, as well as enabling employees to work together from anywhere across the globe.

Not only this, 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.

Long-term growth prospects of tech companies look promising owing to continuous digital transformations. Rapid adoption of cloud computing, and the ongoing integration of AI and machine learning have been major growth drivers.

The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to spur further growth. Moreover, blockchain, IoT, autonomous vehicles, AR/VR and wearables offer significant growth opportunities.

That said, we have highlighted four blue chips with large capital base and solid fundamentals, which may prove to be lucrative options for investors in the months ahead.

Our Picks

Apple (AAPL) is well poised to benefit from the upcoming 5G upgrade cycle. The iPhone-maker is expected to launch its first 5G-supported device later this year. Additionally, continued momentum in the Services segment backed by strong App Store sales and robust acceptance of Apple Music and Apple Pay is expected to drive the stock’s growth this year.

Moreover, the company’s wearables market domination is expected to continue in 2020 owing to strong adoption of AirPods and Apple Watch. The solid uptake of Apple Watch Series 5 is helping the iPhone maker strengthen presence in the personal health monitor space.

The company currently has a Zacks Rank #2 (Buy) and a VGM Score of B. The long-term projected EPS growth rate for Apple is 10.7%.

Apple Inc. Price and Consensus


Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

eBay (EBAY) thrives on growing adoption of e-commerce owing to coronavirus-led social-distancing protocols, quarantine and lockdowns on a global basis. Notably, eBay recently raised its second-quarter 2020 guidance. Growth initiatives, which aim at enhancing seller experience by offering innovative seller tools and delivering improved buyer experience via utilizing structured data, will help eBay gain in the current scenario.

This Zacks Rank #1 (Strong Buy) company has a VGM Score of A. The long-term projected EPS growth rate for eBay is 12.4%.

eBay Inc. Price and Consensus


eBay Inc. Price and Consensus

eBay Inc. price-consensus-chart | eBay Inc. Quote

NVIDIA NVDA is anticipated to keep benefiting from solid demand for graphics processing units (GPUs) in gaming desktops and notebooks. The company’s advanced graphics cards have become very popular recently, thanks to strong rise in e-sports players and PC gamers, as well as more spending on gaming graphics processing units.

In addition, its Turing GPU and real-time ray tracing technology are witnessing increased adoption. The company’s strong presence in the datacenters market is a boon as more and more businesses are shifting to cloud. This has led to a spike in demand for GPUs, which will bode well for NVIDIA.

The company currently has a Zacks Rank #2. The long-term projected EPS growth rate for NVIDIA is 16.9%.

NVIDIA Corporation Price and Consensus


NVIDIA Corporation Price and Consensus

NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote

Micron Technology, Inc.’s MU prospects look promising. The company is gaining from strong demand for memory chips from personal computer manufacturers and datacenter operators, which is a big positive. With the majority of employees working from home, and students relying on desktops and laptops to study from home amid the pandemic-triggered lockdown, the demand for home office equipment is on the rise.

Looking ahead, Micron is set to gain from the revival in demand for DRAM, supported by progress in customer inventory adjustments in the cloud, graphics and personal computer markets. The company offers NAND products. NAND flash chips are used extensively in smartphones and solid-state hard drives. The demand for DRAM and NAND memory chips has driven Micron’s top and bottom lines. The company is focusing on improving the cost structure and raising the mix of high-value solutions in its portfolio, which could push margins higher.

This Zacks Rank #2 company has a VGM Score of B. The long-term projected EPS growth rate for Micron is 10.3%.

Micron Technology, Inc. Price and Consensus


Micron Technology, Inc. Price and Consensus

Micron Technology, Inc. price-consensus-chart | Micron Technology, Inc. Quote

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