Before April's financial collapse, Wall Street witnessed an impressive 15-month rally driven primarily by growth stocks, especially tech stocks. The US stock market rebounded in early May after a disappointing April, with recently released economic data boosting market participants' confidence in stocks.
This technical gathering was guided by a strong push for artificial intelligence (AI), particularly generative AI. The rapid uptake of digital technology and the internet across the world during lockdown has led to significant adoption of AI.
Some financial and technology experts believe that AI is being touted so much that it could create a bubble. We believe that the AI field is still underdeveloped in the U.S. and international markets. If that happens, it will create a huge opportunity for technology companies that manufacture high-end products.
short term factors
April's Wall Street meltdown was driven by market participants' concerns that the Fed would keep interest rates high for an extended period of time, given the persistently high inflation rate and the resilience of the labor market. Met. Rising interest rates have a negative impact on high-growth sectors such as technology.
A large drop in new jobs in April, a notable deterioration in US GDP growth in the first quarter of 2024, contraction in manufacturing and services PMIs in April, and less hawkish statements from Fed Chairman Jerome. As a result, the US stock market rebounded in May. Chairman Powell after the May FOMC meeting.
Following the April non-farm payrolls release, CME FedWatch indicates there is a 67.4% probability that the central bank will cut the benchmark lending rate by 25 basis points at the September FOMC meeting. . The interest rate futures tool also shows that the probability that the Fed will cut rates by 50 basis points is very high at 91.5%.
our picks
Big tech companies are the main beneficiaries of the ongoing rally in tech stocks. Some of these stocks have grown 100-200% over the past year. Beyond the tech giants, several mid-cap tech stocks are poised to benefit from the rally.
We've narrowed our search to five mid-cap technology stocks with great potential for the rest of 2024. These stocks have seen positive earnings estimate revisions within the past 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy).You can view See the complete list of today's Zacks #1 Rank stocks here.
The chart below shows the price performance of five stocks year-to-date.
Amkor Technology Co., Ltd. (AMKR – Free Report) is the world's largest independent provider of semiconductor packaging and test services. AMKR is one of the leading developers of advanced semiconductor packaging and testing technologies.
AMKR offers one of the most extensive integrated sets of packaging and testing services in the industry. These services are the final steps necessary to prepare a semiconductor device for further use. AMKR serves integrated device manufacturers, fabless semiconductor companies, original equipment manufacturers, and contract foundries.
Amkor Technology, which has a Zacks Rank #1, is expected to report revenue and earnings growth of 0.9% and 21.9%, respectively, for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has improved by 3.5% over the past seven days.
Appfolio Co., Ltd. (APPF – Free Report) provides cloud business management solutions for the US real estate industry. APPF provides a cloud-based platform that allows users to automate and optimize common workflows, tools to assist with leasing, maintenance, and accounting, and other technologies and services provided by third parties.
APPF also offers value-added services aimed at enhancing, automating, and streamlining the processes and workflows of property management businesses, such as electronic payments, tenant screening, and insurance services.
Ranked #1 by Zacks, AppFolio is expected to report revenue and earnings growth of 24.7% and over 100%, respectively, for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the past 30 days.
Badger Meter Co., Ltd. (BMI – Free Report ) benefits from strong customer demand for differentiated smart water solutions and strong operational execution. Continued sales momentum for E-Series Ultrasonic Meters, Cellular AMI Solutions, and ORION Cellular Endpoints, as well as increased sales for BEACON Software-as-a-Service, are expected to drive BMI's sales expansion. Masu.
BMI's efforts to expand its global footprint are creating tailwinds. Profits are increasing due to increased sales volumes and a structurally positive sales mix trend. BMI's debt-free balance sheet and acquisition synergies are other advantages.
Zacks Rank #1 Badger Meter's revenue and earnings are expected to grow 13.6% and 23.9%, respectively, for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the past 30 days.
Celestica Co., Ltd. (CLS – Free Report) is one of the world's largest electronics manufacturing services companies serving the computer and communications industries. CLS not only provides competitive manufacturing technology and service solutions for printed circuit assemblies and system assemblies, but also provides post-manufacturing support to many of the world's leading OEM manufacturers.
CLS' extensive product portfolio supports a variety of customer requirements, from low-volume, complex custom products to high-volume general-purpose products. CLS operates through his two segments: Advanced Technology Solutions and Connectivity and Cloud Solutions.
Celestica, which has a Zacks Rank #1, is expected to report revenue and earnings growth of 14.6% and 36.6%, respectively, for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has improved 14.1% over the past 30 days.
Guidewire Software Co., Ltd. (GWRE – Free Report) is a provider of software solutions for property and casualty insurance companies. GWRE's platform combines core operations, digital engagement, analytics, machine learning, and artificial intelligence, delivered to customers through self-managed software or cloud services.
GWRE's core solutions include InsuranceSuite Cloud, InsuranceNow, and InsuranceSuite for self-managed installations. Guidewire InsuranceSuite Cloud consists of PolicyCenter Cloud, BillingCenter Cloud, and ClaimCenter Cloud.
Zacks Rank #2 Guidewire Software's revenue and earnings growth for the current fiscal year (ending July 2024) is expected to be 6.4% and over 100%, respectively. The Zacks Consensus Estimate for current-year earnings has improved 14.3% over the past 60 days.
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