4 Nasdaq Stocks To Dazzle As The Index Hits All-Time High

The Nasdaq turned green this July to eventually scale an all-time closing high on Friday. A flurry of better-than-expected earnings reports by big tech firms, mostly due to their focus on cloud and mobile devices, pushed the index higher. The move by tech companies to provide hefty dividends also stood them in good stead.

Biotechs were another strong contributor toward the Nasdaq’s upward movement. Biotechs soared since late June as investors bet on M&A and innovation, partly offsetting a rout that began in December. Boosting the Nasdaq on Friday was The Priceline Group Inc. (NASDAQ:PCLN) , with both its agency and merchant businesses showing strong momentum (read: Priceline Earnings Beat As Usual, Shares Up).

July’s stellar jobs data that crushed all expectations also bolstered confidence in the U.S. economy and sent investors back to buying riskier tech stocks. Given this bullish sentiment, investing in sound stocks listed in the tech-laden index will be a prudent move.

Nasdaq Rallies to Record High

The Nasdaq Composite Index surpassed its record closing high set in Jul 2015, to finish at 5,221.12 (up 1.1%) on Friday. Such an advance helped the tech-laden index rally for the eighth time in the last nine trading sessions and capped a sixth straight weekly gain, the longest since November. From its high in July last year, the gauge had tanked about 18% over the next seven months, narrowly escaping bear market territory.

But, technology shares roared back to life, banking on arguably the best quarterly performance since 2008, helping the index to come full circle. Focus on cloud and mobile devices helped them deliver big profits. Biotechs didn’t lag behind either, with substantial contributions pushing the index to record highs.

Cloud, Mobile Fuel Tech Profits

The strongest contributor to the Nasdaq’s advance was Amazon.com, Inc. (NASDAQ:AMZN) , gaining almost 50%. Another big benefactor, Microsoft Corporation (NASDAQ:MSFT) climbed at least 20%. Both Amazon and Microsoft beat estimates in the second quarter lifted by their moves to host other companies’ data on their computer services, also known as cloud.

Facebook, Inc. (NASDAQ:FB) was also one of the pillars behind Nasdaq’s advance, gaining around 28% to hit its own all-time high on Friday. Mobile ad revenues were instrumental in driving Facebook’s convincing earnings beat during the second quarter. Alphabet Inc. (NASDAQ:GOOGL) too posted upbeat second-quarter revenues. As companies bought more of its mobile ads and users increased their clicks on those ads, Alphabet ended up posting a blockbuster second-quarter performance (read: 5 Tech Stocks to Buy as Sector Soars to Record Highs).

Tech’s New Attraction: Dividends

Older tech companies have also rallied this year, partly because investors favored dividend-paying stocks, a feature that they had deliberately avoided for quite some time. Take for example, Cisco Systems, Inc. (NASDAQ:CSCO) that didn’t pay dividends in the 1990s, but currently pays a dividend of $1.04 annually. Cisco closed at its highest level in the last week of July since the financial crisis.

Since 2011, Cisco’s dividend yield has grown from 1.4% to 3.4%, according to S&P Dow Jones Indices. From 2011 till the end of 2015, the company’s sales increased at an annualized rate of 4.2%, according to WSJ Market Data Group.

Biotech, Another Big Contributor

Another major contributor toward Nasdaq’s success is biotech stocks. The iShares Nasdaq biotechnology index (IBB) that mostly tracks the performance of biotech and pharma companies had fallen 24% in the first six months of the year, but climbed 16% from June 30.

Amgen Inc. (NASDAQ:AMGN) , one of the strongest players in this space, played a significant role in pushing the index higher. This multinational biopharmaceutical company, which is the second-largest weighed company in the index, is also a dividend grower with a yield of 2.3%. Hopes that M&A activities and the pace of innovation will accelerate are also expected to propel the sector further.

4 Best Nasdaq Stocks to Buy Now

As discussed above, gains in both tech and biotech stocks have helped the Nasdaq post its strongest close ever. Furthermore, a stronger-than-expected July jobs report raised confidence in the strength of the economy. Banking on these positive trends, it is expected that solid tech-laden stocks that are part of the Nasdaq will gain traction.

We have selected four such stocks that boast a Zacks Rank #1 (Strong Buy) or #2 (Buy). The search was also narrowed down with a VGM score of ‘A’ or ‘B’. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners.

Intel Corporation (NASDAQ:INTC) is engaged in the design and manufacture of digital technology platforms. INTC has a Zacks Rank #2 and a VGM score of ‘B’. The company’s current year estimated earnings growth rate is 7.7%. The company’s year-to-date return is 1.5%.

Align Technology, Inc. (NASDAQ:ALGN) designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners, and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services. ALGN has a Zacks Rank #2 and a VGM score of ‘B’. The company’s current year estimated earnings growth rate is 27.5%. The company’s year-to-date return is 39.5%.

Qorvo Inc (NASDAQ:QRVO) is a provider of technologies and radio frequency (RF) solutions for mobile, infrastructure and defense and aerospace applications. QRVO has a Zacks Rank #1 and a VGM score of ‘A’. The company’s current year estimated earnings growth rate is 19.3%. The company’s year-to-date return is 8.2%.

Biogen Inc. (NASDAQ:BIIB) develops, manufactures and delivers therapies for the treatment of neurodegenerative diseases, hematologic conditions and autoimmune disorders. BIIB has a Zacks Rank #2 and a VGM score of ‘B’. The company’s current year estimated earnings growth rate is 18.3%. The company’s year-to-date return is 3.1%.