The Nasdaq-100 is a large-cap growth index containing 100 of the largest non-financial companies (in terms of market capitalization) that are listed on the Nasdaq exchange. The Nasdaq-100, which started in the year 1985, features some of the most creative companies and defines modern day industrials.

The Nasdaq-100 has outperformed the S&P 500 in ten of the past twelve years. The rapid evolvement of the technology sector is the primary reason behind this outperformance, as the index has a large proportion of technology companies. The Invesco QQQ ETF  (QQQ) which is an ETF based on the Nasdaq-100 index, has returned more than 50% since its March lows, and 14.1% over the past month.

If you want to take advantage of the Nasdaq-100’s recent run, it helps to seek out advice and recommendations from Wall Street analysts. Analysts closely follow the fundamentals, price performance, and recent developments of the stocks they cover and recommend them accordingly.

Here are four Nasdaq-100 stocks that currently have a consensus analyst recommendation of Strong Buy: Amazon.com, Inc. (AMZN), Microsoft Corporation (MSFT), Facebook, Inc. (FB), and NetEase Inc. (NTES). Analysts agree on the upside potential of these stocks, which could be a benefit to your portfolio.

Amazon.com, Inc. (AMZN)

Forty out of forty eight Wall Street analysts have a Strong Buy rating on the AMZN. The stock has an average price target of $3665.4. This is 10.8% higher than its current price. AMZN has a weightage of 11.09% in the Nasdaq-100 index. The stock has returned more than 100% since its March lows.

Moderna (MRNA) has chosen Amazon Web Service (AWS) as its preferred cloud provider and also as its standard for analytics and machine learning workloads. Moderna used the AWS powered research engine in the Phase 1 trial for its Covid-19 vaccine candidate. The cloud has helped Moderna speed up its manufacturing process and design research experiments.

AMZN announced that Jack in the Box (JACK) is leveraging AWS for operational efficiency and innovation across its more than 2,200 restaurant chains throughout the nation. Moreover, AMZN’s Project Zero, which was launched in 2019 to protect brands and customers and eliminate counterfeits has been expanded to seven new countries taking the total tally to seventeen countries in which AMZN has a store.

In the second quarter, AMZN’s net sales increased 40% year-over-year and net income increased to $5.2 billion as compared to $2.6 billion in the year-ago period. Furthermore, operating cash flow was up 42% for the trailing twelve months as compared to the previous year.

The market expects AMZN to report an EPS of $7.24 for the quarter ending September 2020, which represents a 71.2% growth over the year-ago number. The average revenue estimate of $92.37 billion for the same quarter indicates an increase of 32% over the year-ago value.

How does AMZN stack up for the POWR Ratings?

A for Trade Grade

A for Industry Rank

A for Buy & Hold Grade

A for Peer Grade

A for Overall POWR Rating

The stock is also ranked #1 out of 57 stocks in the Internet industry.

Microsoft Corporation (MSFT)

MSFT has an analyst average price target of $231.23. This is 8.2% higher than its current price. Twenty seven out of thirty two Wall Street analysts have a Strong Buy rating on the stock. MSFT has a weightage of 10.83% in the Nasdaq-100 index. The stock has gained more than 35% since its March lows.

MSFT announced a strategic partnership with Universal Filmed Entertainment Group to provide the creative community with cloud-based production workflows that enable frictionless remote collaboration and content creation. Furthermore, MSFT announced a three-year strategic partnership with Standard Chartered Bank (OTCMKTS) to help the bank with digital transformation using a cloud-first strategy. In the fiscal fourth quarter that ended in June 2020, MSFT’s revenue increased 13% and operating income increased 8% year-over-year.

MSFT’s consensus revenue estimate of $35.69 billion for the quarter ending September 2020 indicates an 8% increase year-over-year. Also, the market expects the company to report EPS of $1.54 per share, which indicates an 11.6% improvement over the year-ago number. Moreover, MSFT has an impressive earnings surprise history with the company beating consensus EPS estimates in each of the trailing four quarters.

It’s no surprise that MSFT is rated a Strong Buy in our POWR Ratings system. It also has a grade of A for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. In the 92-stock Software-Application industry, it is ranked #1.

Facebook, Inc. (FB)

Thirty seven out of forty nine Wall Street analysts have a Strong Buy rating on FB. In the second quarter, FB’s net income increased 98%, income from operations increased 29%, and total revenue increased 11% year-over-year. FB has a weightage of 4.72% in the Nasdaq-100 index. The stock has gained more than 90% since its March lows.

FB recently launched Facebook Shop which is a new section in the Facebook app to shop for products and discover businesses. The company is also planning to expand checkout on Instagram for US businesses, which simplifies the purchasing process for customers.

The US launch of Facebook News which is a news destination within the app started off well. This new addition helps publishers cater to new audiences. Based on current progress, the company is looking at launching Facebook News in multiple countries such as the UK, Germany, France, India, and Brazil.

FB’s consensus revenue estimate of $19.69 billion for the quarter ending September indicates a year-over-year increase of 11.5%. FB’s earnings surprise history looks pretty good with the company beating the consensus EPS estimates in three of the trailing four quarters. FB’s EPS is expected to grow 17.1% per annum over the next five years.

FB is rated a Strong Buy in our POWR Ratings system. It also has a grade of A for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. It is also ranked #4 out of 57 stocks in the Internet industry.

NetEase Inc. (NTES)

NTES is an interactive online Internet Services company that primarily focuses on the following segments: E-commerce, online game services, advertisement services, E-mail and others. NTES has an average analyst price target of $3671.15, which is 644.8% higher than its current price. Twenty eight out of thirty-seven Wall Street analysts have a Strong Buy rating on the stock. NTES has a weightage of 0.31% in the Nasdaq-100.

In the second quarter, net revenue increased 25.9% year-over-year and the company reported net income from continuing operations of $4.89 as compared to $3.65 in the year-ago period. NTES also declared a dividend of $1.485 for the quarter.

The company’s online game services and NetEase Cloud Music have been doing really well. Moreover, NTES Cloud Music secured a multi-year licensing agreement with Universal Music Group recently. The stock has grown more than 70% since hitting its lows in March.

NTES’s earnings surprise history looks pretty good with the company beating the consensus EPS estimates in each of the trailing four quarters. NTES’s consensus revenue estimate of $2.64 billion for the quarter ending September indicates a year-over-year increase of 26%

NTES’s POWR Ratings reflect this promising outlook. It has an overall rating of Strong Buy with a grade of A for Trade Grade, Buy & Hold Grade, Peer Grade, and a B for Industry Rank. Among the 115 stocks in the China industry, it’s ranked #3.

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AMZN shares were trading at $3,413.36 per share on Thursday afternoon, down $28.49 (-0.83%). Year-to-date, AMZN has gained 84.72%, versus a 9.57% rise in the benchmark S&P 500 index during the same period.

About the Author: Anmol Suratkal

Anmol began his career as a financial writer and evolved into an investment analyst and journalist with a special interest in risky instruments. He specializes in analyzing financial data and writes insightful articles to help investors generate solid long-term returns. More...

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