Tech stocks have been volatile amid uncertainty surrounding the outlook for inflation and the Fed’s plans regarding tapering its bond purchases. According to the Bureau of Labor Statistics, the Consumer Price Index increased 4.2% year-over-year in April 2021. Investors have punished the tech sector in recent weeks amid a broader shift to cyclical stocks to capitalize on the economic recovery.

Notably, CNBC’s Jim Cramer recently asserted that, “The economy’s not going to be wrecked by ruinous inflation. The stock market won’t crash because of government debt”. Despite the fraught environment for tech stocks in general, investors are growing extremely bullish on a few growing companies in this sector.

Indeed, we think HP Inc. (HPQ), TTEC Holdings, Inc. (TTEC), and Silicon Motion Technology Corporation (SIMO), which suffered a price dip lately, are solid bets now given their huge growth prospects.

HP Inc. (HPQ)

Formerly known as Hewlett-Packard Company, HPQ provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments.

Last month, HPQ announced the expansion of HP+, which it claims is  the smartest printing system designed for consumers and small businesses. With  high demand for printing and millions of people working and learning from home, HP+ is modernizing consumers’  printing experience with unique solutions.

Also last month, HPQ was awarded seven Green Good Design Awards across its sustainable PC portfolio for responsible design and manufacturing. Its unique approach to design enables the use of more sustainable and recycled materials, while delivering amazing experiences across its PC portfolio. This should help the company increase its brand value and drive business growth.

In the first quarter, ended  January 31, 2021, HPQ’s net revenue has increased 7% year-over-year to $15.65 billion, while its non-GAAP net earnings increased 24% from its year-ago value to $1.19 billion. The company’s EPS increased 41.5% year-over-year to $0.92. HPQ’s revenue from its  Workstations segment rose 8% sequentially to $382 million over this period.

Analysts expect HPQ’s revenue for the current quarter, ended April 30, 2021 to be $15 billion, representing 16% year-over-year growth. The company’s EPS is likely to increase 74.5% year-over-year in the current quarter.

HPQ’s stock has gained 90.1% over the past year and closed yesterday’s trading session at $31.86. It is currently trading 11.5% below its 52-week high of $36.

It is no surprise that HPQ has an overall A rating, which translates to a Strong Buy in our POWR Ratings system. It also has a B grade for Momentum, Quality and Value. In the B-rated Technology – Hardware industry, it is ranked #3 of 47 stocks.

In total, we rate HPQ on eight different levels. Beyond what we’ve stated above, we have also given HPQ grades for Growth, Sentiment and Stability. Get all the HPQ ratings here.

TTEC Holdings, Inc. (TTEC)

TTEC is one of the largest global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions through its cloud based CXaaS (Customer Experience as a Service) platform. The company’s Digital business operates in conversational messaging and CRM, while its Engage business delivers digital customer engagement, customer acquisition & growth, and other solutions.

In March, TTEC agreed to acquire Avtex, a full-service CX technology and solutions leader. The acquisition should   help  TTEC in further expanding its position as one of the leading global CX technology innovators and in emerging as the largest provider of end-to-end digital customer experience solutions worldwide.

In the first quarter, ended March 31, TTEC’s revenue increased 24.8% year-over-year to $539.22 million. Its adjusted EBITDA increased 50.7% from the year-ago value to $95.88 million, while its non-GAAP income from operations grew 63.8% year-over-year to $79.85 million. The company’s non-GAAP net income increased 71.5% year-over-year to $59.73 million. And its  EPS came in at $1.26 for this period, compared to an EPS of $0.74 in the prior-year quarter.

Analysts expect TTEC’s revenue for the current quarter, ending June 31, 2021, to be $534.04 million, representing  17.9% year-over-year growth. The company’s EPS is likely to increase 29.3% year-over-year to $0.97 for the current quarter.

Over the past year, TTEC has gained 156.5%. It closed yesterday’s trading session at $101.51 and is currently trading 7.7% below its 52-week high of $109.95.

It is no surprise that TTEC has an overall B grade, which equates to Buy in our proprietary ratings system. It has a B grade  for Momentum, Sentiment and Stability. Of  71 stocks in the D-rated Technology – Services industry, it is ranked #12.

In total, we rate TTEC on eight different levels. Beyond what we’ve stated above, we have also given TTEC grades for Growth, Quality and Value. Get all the TTEC ratings here.

Silicon Motion Technology Corporation (SIMO)

SIMO is the global leader in supplying NAND flash controllers for solid state storage devices. It is the largest worldwide supplier for servers, PCs and other client devices and is the merchant market leader in controllers for eMMC/UFS mobile embedded storage used in smartphones, IoT and other applications.

In March, SIMO unveiled the world’s First Merchant SD Express Controller Solution that supports the latest SD 8.0 specification, which should make possible 8K video capture, RAW photography, multi-channel IOT devices, multi-processing automotive storage and other applications requiring ultra-high data speeds. This technological advancement  should increase customers’ reliance on SIMO.

During the first quarter, ended March 31, 2021, SIMO’s non-GAAP gross profit increased 44.6% year-over-year to $92.44 million, while its non-GAAP operating profit increased 82.6% year-over-year to $48.54 million. Its net income rose 36.4% from its year-ago value to $38.66 million. The company’s EPS has increased 38.8% from its year-ago value to $1.11.

SIMO is expected to witness 44.4% revenue growth year-over-year to $197.56 million for the current quarter, ending June 2021. Its EPS is estimated to increase 50.6% from its  year-ago value to $1.22 over the same period.

Over the past year, SIMO’s stock has gained 38.9%. The stock closed yesterday’s trading session at $63.29 and is currently trading 14.6% below its 52-week high of $74.10.

SIMO’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. SIMO has a B grade for Sentiment, Value and Quality. Among the 98 stocks in the Semiconductor & Wireless Chip industry, it is ranked #15.

Click here to see the additional POWR Ratings for SIMO (Momentum, Growth and Stability).

Click here to checkout our Semiconductor Industry Report for 2021

HPQ shares were trading at $32.01 per share on Wednesday afternoon, up $0.15 (+0.47%). Year-to-date, HPQ has gained 31.02%, versus a 12.54% rise in the benchmark S&P 500 index during the same period.

About the Author: Samiksha Agarwal

Samiksha Agarwal has always had a keen interest in financial markets. This has led her to a career as a financial journalist. Through her extensive knowledge of fundamental analysis, her goal is to help investors identify untapped investment opportunities in the stock market. More...

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