The Fed’s monetary policy tightening has caused a significant downtrend in technology stocks. The tech-heavy Nasdaq Composite has lost close to 30% year-to-date.
However, the demand for tech solutions continues to rise. The increasing use of advanced technologies, such as the Internet of Things (IoT), Artificial Intelligence, and Machine Learning, is expected to drive the industry’s growth.
According to Statista, the total data volume of connected IoT devices worldwide is projected to reach 79.4 zettabytes by 2025. Furthermore, the global digital transformation market is expected to grow at a CAGR of 21.1% until 2027.
While the stock market is expected to remain volatile in the near term, we think fundamentally sound tech stocks Cisco Systems, Inc.(CSCO) and Juniper Networks, Inc. (JNPR) might be safe buy-and-hold options.
Cisco Systems, Inc. (CSCO)
CSCO designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China.
On September 27, 2022, CSCO and tech company Accedian joined hands to assist Zain Kuwait, a top digital service provider, in automating its network with increased network visibility and service assurance.
Mohamed Tantawi, managing director, telcos and service providers, META, CSCO, said, “Working with Accedian, we’re enabling Zain Kuwait to simplify network operations with increased visibility and real-time insights while also automating service assurance to help future-proof their networks.”
CSCO’s service revenue increased marginally year-over-year to $3.41 billion for the fourth quarter that ended July 30, 2022. Revenue from its EMEA segment came in at $3.58 billion, up 8% year-over-year. Moreover, revenue from end-to-end security products came in at $984 million, up 20% year-over-year.
Analysts expect CSCO’s revenue to increase 5% year-over-year to $54.13 billion in 2023. Its EPS is estimated to grow 5.1% year-over-year to $3.53 in 2023. It has surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has lost 6.2%. It has a 24-month beta of 0.88.
CSCO’s overall B rating equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Quality. Within the Technology – Communication/Networking industry, it is ranked #5 out of 50 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, Stability, Sentiment, and Value for CSCO.
Juniper Networks, Inc. (JNPR)
JNPR designs, develops, and sells network products and services worldwide. It sells its products through direct sales, distributors, value-added resellers, and original equipment manufacturers to end-users in the cloud, service provider, and enterprise markets.
On September 15, 2022, JNPR introduced Apstra Freeform, the newest expansion to its multivendor data center automation and assurance platform. JNPR aims to strengthen its data center operations management through Apstra Freeform and offer customers a blissful experience irrespective of the topology and protocols used.
JNPR’s total net revenues came in at $1.27 billion for the second quarter that ended June 30, 2022, up 8.3% year-over-year. Its net income increased 82.9% year-over-year to $113.40 million. In addition, its EPS increased 84.2% year-over-year to $0.35.
JNPR’s revenue is expected to increase 10.1% year-over-year to $5.21 billion in 2022. Its EPS is estimated to grow 6.3% year-over-year to $1.85 in 2022. The stock has lost 1.4% over the past month. It has a 60-month beta of 0.86.
JNPR has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Quality. It is ranked #12 in the same industry. We’ve also rated JNPR for Value, Momentum, Sentiment, Growth, and Stability. Get all JNPR ratings here.
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CSCO shares were trading at $41.54 per share on Wednesday morning, down $0.28 (-0.67%). Year-to-date, CSCO has declined -32.39%, versus a -20.66% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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