August 30, Select Sector SPDR ETF technology (NYSEARCA:XLK) peaked at $ 159.89. The ETF then fell 7% through October 3 as volatility weighed on the markets amid numerous investor concerns and rising yields. But tech stocks have since rebounded, nearly peaking.
XLK has since increased by 7%, compared to S&P 500 gain of 5%.
This has upped the names and fortunes of many tech companies as bargain hunters buy low. Many of these companies are in an uptrend and showing positive momentum. But the question is, how long is it going to last?
One way to see if this momentum will continue is to use the Momentum Grade in StockNews.com POWR odds system. If a stock has a buy rating or higher and a Momentum rating of A or B, there’s a good chance the momentum will continue. That’s because our Momentum Grade isn’t just looking at current momentum; it analyzes the ability of a security to outperform in the future.
Looking at these ratings, investors should consider adding one of these three tech stocks to their portfolios:
- Materials applied (NASDAQ:AMAT)
- KLA Corporation (NASDAQ:KLAC)
- Amdocs Limited (NASDAQ:DOX)
Technology stocks: Applied Materials Inc. (AMAT)
Today’s leading tech company, AMAT, is one of the world’s largest suppliers of semiconductor manufacturing equipment, providing materials engineering solutions to help fabricate nearly any chip in the world. world. Company systems are used in almost every major step of the process. The tools are used in chemical and physical vapor deposition, etching, chemical mechanical polishing and scanning electron microscopes for flaw inspection.
The company benefits from the momentum of its semiconductor systems and global applied service segments. AMAT is also seeing strong demand for silicon in various applications in several markets.
The company is well positioned in the areas of engraving and CVD and is optimistic about increased foundry expenses. NAND is also winning because of its growing application in cloud computing and its potential in mobile.
For example, the emergence of data centers is expected to be a solid contributor to AMTA’s sales growth due to the growing demand for DRAM by cloud service providers. The company has also been successful in expanding beyond semiconductors. For example, AMAT is poised to take advantage of the transition from LCD technology to OLED technology.
The company has an overall rating of B, which translates into a “buy” rating in our POWR rating system. AMAT has a Momentum Grade of B, which is not surprising as the stock is up 55% for the year. This dynamic should continue due to the growing demand for its offers.
The company also has a B quality rating due to strong fundamentals. For example, AMAT had $ 6.5 billion in cash at the end of the most recent quarter. This compares favorably to the absence of short-term debt. We also provide Growth, Value, Stability, and Sentiment ratings for AMAT, which you can find here.
AMAT is ranked # 34 in the B-rated wireless semiconductor and chip industry. For more top stocks in this highly rated industry, click here.
KLA Corporation (KLAC)
KLAC designs and manufactures diagnostic and control systems, performance management and process monitoring for the semiconductor industry. The systems are used to analyze the manufacturing process at different stages of a product’s development. The company’s laser scanning products are used for wafer qualification, process monitoring and equipment monitoring.
The company also provides tools and inspection systems for optical metrology and electron beam metrology. KLAC has grown in the process control market. In addition, an increase in the expenses of its customers helps to stimulate the growth of the company in the foundry-logic market.
KLAC also benefits from improved pad cleanliness in the bare pad market, which is driving demand for its pad products.
The company also benefits from technological transitions. This happens when businesses need to expand their capabilities and tools with new processes and technologies, resulting in performance management solutions. Technology transitions to 3D NAND, FinFET, TSV and multi-patterning are expected to drive demand for the company in the coming quarters.
KLAC has an overall rating of B and a “buy” rating in our POWR rating system. The company has a Momentum rating of B because the company is up 28% for the year. KLAC also has a quality rating of A due to a rock solid balance sheet. Its current ratio of 2.7 indicates that it has sufficient liquidity to manage its short-term obligations.
To access KLAC’s other ratings (Growth, Value, Stability and Sentiment), click here. KLAC is ranked # 23 in the semiconductor and wireless chip industry.
Technology stocks: Amdocs Limited (DOX)
DOX provides software and services to service providers in the communications, cable and satellite, entertainment and media industries. It develops, markets, supports, implements and operates its open and modular cloud offer. The company offers business support systems, operational support systems and managed services.
The company also develops software for mobile financial services and advertising and media solutions. DOX undoubtedly benefits from acquisitions that complement its original activity. So far, the company has made 21 acquisitions to increase its product portfolio and expand its geographic footprint. For example, he recently bought Sourced Group, a technology consulting company.
This acquisition strengthened DOX’s ability to assist in the cloud transformation of its service provider customers. DOX has also expanded its global customer base by signing long-term contracts with large telecommunications companies. Last year, DOX had a 12-month backlog of $ 3.6 billion due to projects with companies such as Comcast (NASDAQ:CMCSA), T Mobile (NASADQ:TMUS), and PLATE (NASDAQ:PLATE). In addition, its network functions virtualization area is also contributing to growth.
DOX has an overall rating of B, resulting in a “buy” rating in our POWR rating system. The company has a value rating of B, which makes sense with a forward P / E of 14.77. DOX also has a Momentum rating of B, as its stock has risen 41% in the past year and has shown medium to short term bullish momentum.
To access all of the DOX ratings including Growth, Stability, Sentiment, and Quality, click here. DOX is ranked # 4 in the Software Industry – Enterprise. For more top ranked stocks in this industry, click here.
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This article was written by David Cohne, chief value strategist for StockNews.com. David has been helping investors find the most profitable stocks for over 20 years.
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At the time of publication, David Cohne did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com publishing guidelines.
David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services firms, hedge funds and online publications. David enjoys researching and writing about stocks and markets. It takes a fundamental quantitative approach in evaluating stocks for readers.