5 Nasdaq Stocks That Helped The Index Outperform In 2017

The Nasdaq Composite index has performed exceptionally well in the year so far by setting record highs for more than 60 times. The index first hit the 6,000 milestone on Apr 25, crossing the 5,000 mark after 17 years. The index has been up 27.4% in the year-to-date (YTD) period, outperforming Dow Jones Industrial Average and S&P 500 gains of 24% and 18.5%, respectively.

This can be attributed to the outstanding rally of tech stocks which constitute over 50% of weightage in the index. The technology sector has been benefiting from increasing demand for cloud-based platforms, rapid adoption of Artificial Intelligence (AI) tools, Augmented/Virtual (AR/VR) reality devices, autonomous cars, advanced driver assisted systems (ADAS), as well as Internet of Things (IoT) related software and hardware.

Needless to say, tech stocks are preferred by astute investors due to their proprietary technological expertise and heavy cash balances. These companies also relish high barriers to entry, which position the firms for faster growth in the market.

Some market pundits believe tech stocks are riding high on the years-long economic expansion, while most of them attribute part of this upsurge to the Trump administration’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.

5 Tech Stocks Outpacing Nasdaq

Here are the five Nasdaq-listed tech stocks which have performed phenomenally this year and have potential to retain the momentum in the next year as well. All these stocks have appreciated more than 50% in the year, so far, in turn helping Nasdaq outperform the market.

NVIDIA Corporation (NASDAQ:NVDA) remains one of the best performers in the tech space. The company has grabbed attention with striking performances on the back of impressive earnings results and strong growth projections. The stock has surged 74.7% in the year so far.

Given the accelerated momentum in AI, gaming, datacenter and automotive technology, we believe this Zacks Rank #1 (Strong Buy) stock, with long-term EPS growth estimate of 10.3%, will continue to rally in the near term. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)

Lam Research Corp. (NASDAQ:LRCX) has soared a whopping 72.2% in 2017 so far. The company’s back-to-back quarters of overwhelming results have boosted investors’ confidence. The stock flaunts a Zacks Rank #1 and has a long-term EPS growth estimate of 14.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The improving WFE market, strong demand for server DRAM and increased adoption rates of 3D NAND technology are key catalysts. We believe the strong demand for bit growth in server DRAM and NAND will continue, driven by cloud computing and IoT. This will open up more opportunities for Lam Research in the near future.

Another tech stock, Adobe Systems Inc. (NASDAQ:ADBE) , has also had a remarkable run this year, rallying 70%. Adobe has been putting in commendable efforts toward establishing its presence in cloud-related software areas such as documents and marketing. Adobe Experience Manager, which enables brands to offer a personalized experience, has also been witnessing robust growth.

We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, strong cash flow generation and solid balance sheet. Also, the company’s expansion in growing markets such as artificial intelligence and machine-learning framework is a big positive. The stock carries a Zacks Rank #2 (Buy) and has a long-term EPS growth estimate of 17%.

Sunnyvale, CA-based NetApp Inc. (NASDAQ:NTAP) has been up 62.7% in the YTD period. The stock sports a Zacks Rank #1 and has a long-term EPS growth estimate of 11.3%. The company’s expertise in the flash array market is strengthening its prominence in the storage area network (SAN) and converged infrastructure markets. NetApp is positive about catering to the exponential rate of data growth with its cloud-integrated all-flash solutions that fit well with hybrid cloud infrastructure.

We believe NetApp is well positioned to enjoy steady growth with its diversified portfolio and strong distribution channels that will drive demand for the products in the near term.

Marvell Technology Group Ltd. (NASDAQ:MRVL) is also among the top performers which has gained 56.1% in the year so far. It is a promising player in the solid state drive (SSD) controllers market and has been benefiting from the rising demand for SSD products. The stock flaunts a Zacks Rank #1 and has a long-term EPS growth estimate of 11.3%.

The storage market is witnessing a steady increase in demand, given fast-growing data volume and especially exponential growth in unstructured data. We believe the company is well positioned to grab this opportunity.

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