The demand for tech stocks seems to have no limit. Though tech stocks sometimes slide a couple of percentage points in a day of trading, few have declined more than 3% to 4% in recent times.
For every seller of tech stocks, there seem to be several buyers waiting in the wings. This trend is likely to continue for years or even decades as tech-obsessed Gen Zers and millennials enter the market, pushing tech stocks to new heights.
If you are struggling to pinpoint potential flaws in AMZN’s business plan, you are not alone. Though fraudulent third-party sellers hawking fake or low-quality products on AMZN’s shopping platform are certainly worrisome, most AMZN investors are riding high on cloud nine as their investment generates massive returns.
AMZN has “A” Grades in the Industry Rank and Trade Grade POWR Rating components along with a “B” Buy & Hold Grade. AMZN is ranked 14th out of more than 60 publicly traded companies in the Internet industry.
If the solid POWR Ratings are not enough to give you confidence in AMZN, consider analysts’ bullish take on the stock. Analysts have established a price target of $3,825.60 for AMZN, indicating a potential 15% upside. If you look at AMZN’s chart, it appears the stock has established a trading floor at $3,000. It is currently trading $200 below its 52-week high.
AMZN makes money from several revenue streams, including its website, Whole Foods, Twitch video game streams, marketplace seller ads, its Mechanical Turk labor platform, Prime Video streaming, and more. Though AMZN may lose some customers as society reopens following the dispersal of coronavirus vaccines, the company will retain a good portion of its record-setting November/December Amazon Prime enrollees.
Graphics processing is NVDA’s specialty. The company develops and makes graphics processing units, communications processors, media processors, and other electronics geared toward the consumer market. NVDA technology is used in gaming consoles as well as virtual reality platforms. The rapid growth of gaming bodes well for NVDA, considering the fact that gaming processors account for half its revenue.
The POWR Ratings show NVDA has an “A” Industry Rank and “B” grades in the Buy & Hold Grade and Trade Grade components. NVDA is ranked 42nd out of 87 stocks in the Semiconductor & Wireless Chip industry. Analysts have established an average price target of $600.36 for the stock, indicating a potential 16% upside. The stock appears to have established a price floor of $475 over the past six months.
NVDA’s GeForce RTX 30 graphics cards are two times as fast and efficient as their predecessor, helping games look nearly photorealistic. Furthermore, NVDA’s EGX edge artificial intelligence platform consisting of hardware and software that supports artificial intelligence at the network edge has also proven quite successful. These are just a couple of examples of NVDA innovation that has catalyzed revenue more than 200% and earnings more than 530% across the past half-decade.
China’s rapid population growth is continuing despite the pandemic. In fact, life is back to normal in Wuhan, China, the location where the coronavirus first appeared. NTES is benefitting from that return to normalcy. NTES provides Chinese language content and services, much of which is delivered through web-based games, its web portal, and various value-added services.
The POWR Ratings reveal that NTES has an “A” grade in the Peer Grade and Trade Grade components and a “B” Buy & Hold Grade. NTES is ranked in the top 10 out of 115 China stocks. Analysts are bullish on NTES, setting an average price target of $108.50, indicating a potential 16% upside.
NTES is priced $11 below its 52-week high of $103.53, yet its forward P/E ratio is a mere 31.28, indicating it is not significantly overpriced considering it is a tech stock. NTES is attractive thanks to its accelerating revenue growth that hit 27% in the third quarter of 2020. Though three-quarters of NTES revenue stems from web-based games, the company’s streaming music service is building momentum.
The music service includes the opportunity for Alibaba (BABA) customers to enjoy a Cloud Music annual subscription at no cost. This is just one example of how NTES executives are attempting to expand the company’s horizons with an eye on the future.
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AMZN shares . Year-to-date, AMZN has gained 77.82%, versus a 17.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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