Election Gridlock Lifts Tech Stocks: 5 Top Picks

This post was originally published on this site

The outcome for the U.S. elections is now hanging in the balance. It’s, no doubt, a closely-contested election and investors are confident about a divided Congress. In the Senate, Republicans are likely to have taken control, squashing the possibility of a Democratic sweep in Washington. Meanwhile, Democrats will undoubtedly keep the House.

Interestingly, before the Election Day, market pundits were apprehensive about unclear results and its impact on the economy vis-à-vis the stock market. Yet, at present, market experts seem pretty calm despite the gridlock at Capitol Hill.

What’s more, tech stocks in particular have found a new lease of life, with big names like Microsoft, Amazon, Alphabet and Facebook gaining significantly on Nov 4. In fact, the tech-laded Nasdaq outperformed other foremost indexes, including the Dow.

This is because a divided Congress, no matter who wins the election, will find it extremely difficult to impose stringent taxes and other regulations at will. This, to some degree, bodes well for prominent tech players who are presently in the middle of antitrust investigations.

Lest we forget, legislations were being prepared before the Election Day on an antitrust violation report on Google, Apple and Amazon, to name a few. And with odds of a blue wave low, the Senate’s move to pass any regulation that impacts the tech industry as of now diminishes.

Both the parties, by the way, were expected to come up with the required stimulus measures once elected. But if the Democrats were in a position to take charge of both the House and the Senate, they could have, as promised, come up with a massive coronavirus relief package worth at least $2 trillion. Such a move could have pepped up economically-sensitive sectors. But since it seems like a far-fetched possibility, shares of companies like Boeing and Ford declined on Nov 4.

Tech stocks, in the meanwhile, got their mojo back as they did in the earlier stages of the coronavirus pandemic, with many investors expecting them to be a perfect hedge for a weak economy.

However, some may not agree that the economy is in shambles. After all, both the manufacturing and service side of the economy at least are showing signs of expansion amid the pandemic, with consumers remaining hopeful about their present as well as future financial conditions. But one thing is for sure that rise in coronavirus cases is showing no signs of abating, compelling people to stay and work from home, a secular trend that will continue to remain beneficial for tech stocks.

5 Top Tech Stocks to Buy Now

While the election gridlock played its part in boosting tech players, which as it is are perceived to be the best bets amid uncertainties, these stocks are expected to move north with the escalating COVID-19 cases. We have, thus, selected five tech stocks that flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Amkor Technology, Inc. AMKR is one of the largest providers of semiconductor packaging and test services. The Zacks Consensus Estimate for its current-year earnings has risen 24% over the past 60 days. The company’s expected earnings growth rate for the current year is 121.4%.

Avnet, Inc. AVT is one of the world’s largest distributors of electronic components and computer products. The Zacks Consensus Estimate for its current-year earnings has climbed 21.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 18.2%.

Fair Isaac Corporation FICO develops analytic, software, and data management products. The Zacks Consensus Estimate for its current-year earnings has risen almost 3% over the past 60 days. The company’s expected earnings growth rate for the current year is 15.7%.

Plantronics, Inc. PLT manufactures, markets, and sells integrated communications and collaborations solutions. The Zacks Consensus Estimate for its current-year earnings has moved 69.5% up over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 213.3% and 160%, respectively.

Ultra Clean Holdings, Inc. UCTT is a developer and supplier of critical subsystems for the semiconductor capital equipment industry. The Zacks Consensus Estimate for its current-year earnings has climbed 11.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 196.7%.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Ultra Clean Holdings, Inc. (UCTT) : Free Stock Analysis Report
 
Avnet, Inc. (AVT) : Free Stock Analysis Report
 
Amkor Technology, Inc. (AMKR) : Free Stock Analysis Report
 
Fair Isaac Corporation (FICO) : Free Stock Analysis Report
 
Plantronics, Inc. (PLT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.