Scoop Up These 4 Underperforming Tech Stocks for a 2022 Rebound

NASDAQ: INTC | Intel Corporation News, Ratings, and Charts

INTC – As businesses across industries continue to invest significantly in tech upgrades, the tech industry should keep thriving. Therefore, we think it could be wise to add tech stocks Intel (INTC), International Business Machines (IBM), NICE (NICE), and Check Point Software (CHKP) to one’s portfolio. Although these stocks have underperformed the S&P 500 significantly this year, we think the companies’ impressive revenue and earnings outlook should help their shares rebound in price in 2022. So, let’s examine these names.

With hybrid working arrangements becoming the new normal and businesses investing heavily on tech upgrades, the United States tech spending is expected to expand by 6.7% in 2022. As companies accelerate their digital transformations, the technology industry is expected to witness strong growth next year. IDC expects the technology industry to exceed $5.3 trillion in 2022.

Investors’ interest in technology stocks is evidenced by the iShares Global Tech ETF’s (IXN) 30.6% returns over the past year versus the SPDR S&P 500 ETF Trust’s (SPY) 28.5% gains.

Given this backdrop, we think it could be wise to bet on tech stocks Intel Corporation (INTC), International Business Machines Corporation (IBM), NICE Ltd. (NICE), and Check Point Software Technologies Ltd. (CHKP). Although these stocks have underperformed the S&P 500 significantly in 2021, we think they possess the requisite fundamental strength to rebound in 2022.

Intel Corporation (INTC)

INTC in Santa Clara, Calif., is a global manufacturer and designer of technologies for the cloud, smart, and connected devices for retail, industrial, and consumer uses. The company operates through DCG; IOTG; Mobileye; NSG; PSG; CCG, and All Other segments. Accelerators, Connectivity, Memory and Storage, Platform products, and Boards and Systems are some of INTC’s product portfolios.

INTC’s labs launched the Intel Research Center for Integrated Photonics for Data Center Interconnects this month. The research center should collaborate with top scientific minds across the U.S. to accelerate the advancement of integrated photonics for the next generation of computing interconnects.

During the third quarter, ended September 25, 2021, INTC’s net revenue increased 4.6% year-over-year to $18.1 billion. The company’s gross margin grew 10.3% from its year-ago value to $10.75 billion. Its operating income rose 3.3% from the prior-year quarter to $5.23 billion. Also, the company’s net income increased 55.6% year-over-year to $7 billion.

INTC has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to increase 3.2% per annum over the next five years. INTC has gained 4.8% in price compared to the S&P 500’s 28.5% returns over the past year.

INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

Also, the stock has an A grade for Value and Momentum and a B grade for Quality. We have also graded INTC for Sentiment, Stability, and Growth. Click here to access all INTC’s ratings. INTC is ranked #8 of 99 stocks in the A-rated Semiconductor & Wireless Chip industry.

Click here to checkout our Semiconductor Industry Report 

International Business Machines Corporation (IBM)

IBM is a multinational information technology corporation that offers cloud computing, artificial intelligence, data analytics, IoT, IT infrastructure, digital workspace, and cybersecurity. The Armonk, N.Y.-based company also provides hosting and consulting services in areas ranging from mainframe computers to nanotechnology and operates in over 171 countries.

This month, IBM acquired SXiQ, an Australian digital transformation services company that specializes in cloud applications, cloud platforms, and cloud cybersecurity. IBM believes that the acquisition should bring additional hybrid and multi-cloud expertise, which is at the core of open innovation for clients.

IBM’s total revenue for the third quarter, ended September 30, 2021, increased 0.3% year-over-year to $17.62 billion. The company’s revenue under cloud and cognitive software grew 2.5% from its year-ago value to $5.69 billion. Its gross profit came in at $8.17 billion. Also, the company’s net income amounted to $1.13 billion for the period. IBM has gained 12.1% in price over the past year.

IBM has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters. In addition, its EPS is expected to increase 11.6% in the current year.

It is no surprise that IBM has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Value, and Quality. We have also graded IBM for Momentum, Sentiment, Stability, and Growth. Click here to access all of IBM’s ratings. IBM is ranked #9 of 53 stocks in the C-rated Technology – Hardware industry.

NICE Ltd. (NICE)

Based in Ra’anana, Israel, NICE is a global enterprise software provider that operates in two segments: Customer Engagement; and Financial Crime and Compliance. The company’s segments provide data-driven insights, real-time and cross-channel fraud prevention, anti-money laundering, brokerage compliance, and enterprise-wide case management. NICE also offers CXone, a cloud-native open platform to support contact centers.

This month, NICE introduced new AI-powered capabilities that enable organizations to maximize the benefits of Robotic Process Automation (RPA). NICE RPA’s new capabilities should enable organizations to exploit the power of digitization within their business.

NICE’s total revenue for the third quarter, ended September 30, 2021, increased 19.7% year-over-year to $490.4 million. The company’s gross profit grew 22.2% from its  year-ago value to $329.56 million. Its operating income rose 3.6% from the prior-year quarter to $64.17 million. Also, the company’s net income came in at $47.23 million during the period.

Analysts expect NICE’s revenue to increase 10% year-over-year to $2.1 billion in its fiscal 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Its EPS is estimated to grow 13.3% in the current year. The stock has gained 11% in price over the past year.

NICE’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Growth, Stability, and Quality.

In addition to the POWR Rating grades I have just highlighted, one can see NICE’s ratings for Momentum, Value, and Sentiment here. The stock is ranked #16 of 169 stocks in the F-rated Software – Application industry.

Click here to check out our Software Industry Report 

Check Point Software Technologies Ltd. (CHKP)

Headquartered in Tel Aviv, Israel, CHKP is a global provider of cyber security solutions to governments and corporate enterprises. The company protects its customers from fifth generation cyber-attacks of malware, ransomware, and others. CHKP also offers a multilevel security architecture to defend enterprises’ cloud, network, and mobile device-held information.

Last month, CHKP launched Check Point Mind, a knowledge training portal, in collaboration with more than 200 training partners. Through CheckPoint Mind, customers, including cybersecurity professionals, can acquire knowledge and skills on cybersecurity.

CHKP’s total revenues increased 4.9% year-over-year to $534 million in the third quarter, ended September 30, 2021. The company’s operating income came in at $261.3 million. Its net income amounted to $219.8 million. Also, the company’s EPS grew 0.6% from the year-ago value to $1.65.

Analysts expect CHKP’s revenue for its fiscal year 2021 to increase 4.3% year-over-year to $2.15 billion. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Its EPS is estimated to grow 5.9% next year. CHKP has gained 1.6% in price versus the S&P 500’s 11.5% returns over the past six months.

CHKP’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. Also, the stock has an A grade for Quality and a B grade for Value. We have also graded CHKP for Stability, Sentiment, Momentum, and Growth. Click here to access all CHKP’s ratings. CHKP is ranked #3 of 27 stocks in the D-rated Software – Security industry.

Click here to checkout our Cybersecurity Industry Report 


INTC shares were trading at $52.07 per share on Thursday morning, up $0.24 (+0.46%). Year-to-date, INTC has gained 7.85%, versus a 29.61% rise in the benchmark S&P 500 index during the same period.


About the Author: Priyanka Mandal


Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...


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