Looking For Tech Exposure? Buy 5 Stocks Upgraded To Rank #1

The technology sector has lately been spooked by a spate of negative news from some of its key companies. Among the worst hit were FANG stocks as Facebook’s (NASDAQ:FB) data scandal raised concerns over stringent regulations for the social media space, and a series of allegations from Donald Trump via Twitter on its business practices spurred Amazon’s (NASDAQ:AMZN) sell-off.

The attack from industry players like chipmaker Taiwan Semiconductor Manufacturing (NYSE:TSM) and semiconductor-equipment supplier Lam Research (NASDAQ:LRCX) added to the latest chaos. Taiwan Semiconductor warned of waning mobile demand for the second quarter and thus reduced its sales growth target for this year to 5% from its prior outlook of 5-7% growth while Lam Research offered a disappointing outlook for chip-gear shipments for the rest of the year.

Notably, TSM is Apple's (NASDAQ:AAPL) biggest supplier and the negative news has taken a toll on shares of the technology giant. Apple shed $60 billion in two days following the news. Several global chipmakers also lost market value, including Analog Devices (NASDAQ:ADI) , Qualcomm (NASDAQ:QCOM) and Qorvo (NASDAQ:QRVO) .

While a number of these headwinds have spread negative sentiments in the space, the rapid adoption of cutting-edge technology and solid corporate earnings are expected to fuel growth. In particular, Q1 earnings from 29.9% of the sector’s total market capitalization reported so far are up 36.3% on 13.7% higher revenues, with 100% of the companies beating on earnings and 85.7% exceeding top-line estimates. Overall, earnings and revenues for Q1 are expected to grow 22.6% and 11.9%, respectively.

Given the optimism, a number of stocks in the sector have seen their Rank surging to the top-most rung in a couple of days. These are also backed by strong fundamentals compared to many others. Any of these could be a compelling choice to beat the ongoing tech turmoil and make for great picks this earnings season. You can see the complete list of today’s Zacks #1 Rank stocks here.

On Assignment Inc. (NYSE:ASGN)

This provides IT and professional services primarily in the technology, creative/digital, engineering, life sciences and government sectors. The stock has an expected earnings growth rate of 34.43%, much higher than the industry average of 24.68%. Sales are also expected to grow at an above-industry average rate of 25.64%. Additionally, the stock seems undervalued with a P/E of 19.97 when compared with industry average of 20.09%. The company came up with quarterly results on Apr 25, wherein it outpaced the Zacks Consensus Estimate for earnings by 10.67% and for revenues by 1%.

ServiceNow, Inc. (NYSE:NOW)

This provides cloud-based services that automate enterprise IT operations. It also delivered a huge earnings beat of 51.35% and revenue beat of 2.83% on Apr 25. The stock has an expected earnings growth rate of 68.40% for this year, much higher than the industry average of 24.68%. Sales are also expected to grow above-industry average at 32.14%.

VeriSign Inc. (NASDAQ:VRSN)

This is a global leader in domain names and Internet security, enables Internet navigation for many of the world's most-recognized domain names and provides protection for websites and enterprises around the world. The stock saw positive earnings estimate revision of a penny over the past 30 days for the yet-to-be-reported quarter. Analysts raising estimates right before earnings is a pretty good indicator of some favorable trends for the company. The company is slated to release its result on Apr 26 after market close.

VeriSign has a Zacks Rank #1 and has an Earnings ESP of +2.83%, indicating high chances of beating estimates this quarter. Betting on stocks that have a combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) usually leads to profits in an investor’s portfolio. Our research shows that the chance of a positive earnings surprise is as high as 70% for the stocks with this combination. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Seagate Technology plc (NASDAQ:STX)

This company offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. It saw positive earnings estimate revision of a couple of cents over the past seven days for the yet-to-be-reported quarter (results expected on May 1). It has an Earnings ESP of +3.43%. The stock seems attractively valued at P/E of 11.82, lower than the industry average of 15.81.

SMART Global Holdings Inc. (NASDAQ:SGH)

This company is a designer, manufacturer and supplier of electronic subsystems to OEMs and is engaged in the computer, industrial, networking, telecommunications, aerospace and defense markets. It has a whopping earnings growth estimate of 174.78% for this fiscal year, much higher than the industry growth of 15.31%. Revenue growth of 841.99% is also projected to be above the industry growth of 7.12%. Further, SGH is a cheap choice at present given its P/E ratio of 6.28 versus industry’s P/E of 16.89.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

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Seagate Technology PLC (STX): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

VeriSign, Inc. (VRSN): Free Stock Analysis Report

ServiceNow, Inc. (NOW): Free Stock Analysis Report

Qorvo, Inc. (QRVO): Free Stock Analysis Report

QUALCOMM Incorporated (QCOM): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Analog Devices, Inc. (ADI): Free Stock Analysis Report

Lam Research Corporation (LRCX): Free Stock Analysis Report

Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report

On Assignment, Inc. (ASGN): Free Stock Analysis Report

SMART Global Holdings, Inc. (SGH): Free Stock Analysis Report

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