Tech stocks to add to your watchlist
Even though tech stocks haven’t had the best start this year, there are still a couple of household names worth buying. Learn who they are and how you can take advantage of this opportunity.
by Aline Barbosa
These two tech stocks could be enough to hold you through a recession.
The talk of a possible recession is still looming in the market and investors are growing even more concerned. Despite not having the best year so far, tech stocks are presenting market participants with some interesting opportunities to buy big household names at a discount. So instead of fretting over uncontrollable situations, maybe now is the time for investors to determine which companies have a better chance of emerging from a potential downturn.
The iShares Expanded Tech-Software Sector, an ETF (exchange-traded fund) which tracks the conduct of the software segment, has decreased by over 20% in 2022 alone. By looking at these developments and a tangible probability to rise above an economic decline stronger, we’ve selected a couple of software stocks that could weather out the recessionary storm.
Microsoft is a technology company that needs no introductions. They’ve been a dominating powerhouse in the computer world since its creation, back in 1975. The firm has always been one step ahead of the competition and at the cusp of new technology. Its recent hiring initiative around Web3 being the most recent evidence of such fact.
Not long ago, the company tried to acquire a well known name in the gaming sector. Experts say the move could be an effort to dive into the cryptocurrency and NFT mania that’s been taking over the world by employing more products that are focused on crypto. Even so, Microsoft’s essential component at the moment is its Azure cloud line. Azure’s currently at a 21% market share. It loses the number one spot only to Amazon’s AWS, which dominates the cloud business with a 33% share.
MSFT recently announced a minor reduction in financial guidance for the end of Q2 while most of its competitors announced some significant cuts. This particular development could signal the durability of Microsoft’s business.
Although the company’s tech stocks have dropped a little over 4% in May, they have increased on a higher trading volume this month. At the present, MSFT’s shares are over the 20-day SMA (Simple Moving Average) and about to go above the $280 level. Financial analysts rate Microsoft’s tech stocks a strong buy, with an average price of $356.30 within the next 12 months. That is 30.75% over its current trading price.
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What makes Oracle stand out amongst other companies is that it has a database that’s required to run key business transactions within big companies. That ends up making them the preferred option of all software tools. However, this is not the only selling program Oracle has. The company’s latest earnings report data showed a YoY (Year-on-Year) growth of 4.2% with a revenue of over $10.5 billion.
Meanwhile, its EPS (earnings per share) were above expectations by just $0.05, totalling at $1.13. Moreover, Oracle just finished an approval process to acquire Cerner (CERN). The buy out should enable the company to thrive in the medical health sector and develop a better functioning cloud service in the next few years.
The tech stocks of the company didn’t exactly start 2022 well, with a 17% drop YTD (year-to-date). That said, the stock remains above the 20-day Simple Moving Average around $65 per share. Its trading volumes have been steady, which could indicate a side move.
Financial analysts rate the Oracle’s tech stocks a moderate buy. The prediction is that the average price could reach $90.06 within the next 12 months. That would be a 23.90% increase of its current trading price.
Overall, both companies present a strong cash flow and balance sheets. They are well-known in the tech and software sectors and have been active for years. Their stability and future investments should be enough to keep them flourishing, even with difficult market conditions.
If you need any help in diversifying your portfolio, follow the link below for some useful tips!
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