2 Tech Growth Stocks To Snatch Up This Summer

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While high-growth tech stocks dominated the market last year, they failed to maintain their strength earlier this year as investors rotated out of expensive tech stocks on concerns over inflation and to capitalize on the recovering economy by betting on cyclical stocks. However, this sentiment seems to be changing. The tech-heavy Nasdaq Composite hit an intraday record high on June 22 following Federal Reserve Chair Jerome Powell’s reiteration that he believes inflation pressures will be temporary. Investors’ increasing interest in tech stocks is evident in the Technology Select Sector SPDR Fund’s (XLK) 6.2% gains over the past month compared to the SPDR S&P 500 Trust ETF’s (SPY) 2% returns.

The technology sector is well-positioned to grow as businesses, broadly, continue to digitize their operations. According to Statista, spending on IT services is expected to amount to more than $1.1 trillion in 2021.

So, we think it’s wise to now bet on NXP Semiconductors N.V. (NXPI) and Corning Incorporated (GLW). These names possess solid growth attributes and are expected to generate significant returns in the coming months.

NXP Semiconductors N.V. (NXPI)

Headquartered in Eindhoven, the Netherlands, NXPI is a semiconductor company that provides high-performance, mixed-signal, and standard product solutions. Its product portfolio includes microcontrollers, application processors, communication processors, and wireless connectivity solutions.

For its fiscal first quarter, ended April 4, 2021, NXPI’s total revenue increased 27% year-over-year to $2.57 billion. Its net income came in at $353 million compared to a $21 million loss in the prior year quarter. The company’s EPS was  $1.25 compared to an $0.08 loss per share in the year-ago period. NXPI’s revenue increased at a 6 % CAGR over the past five years.

The company’s revenue is expected to increase 22.6% year-over-year to $10.56 billion in its fiscal year 2021. NXPI’s EPS is expected to come in at $2.31 for the current quarter, ending June 30, 2021, representing a 145.7% year-over-year increase. It surpassed the consensus EPS estimates in each of the trailing four quarters.

This month, NXPI introduced its beta Ultra-Wideband (UWB) development tools from its NXP Trimension portfolio. They will interoperate with the U1 chip in supported Apple (AAPL) products. This innovation is expected to expand the company’s market reach. The stock has gained 68.7% over the past year to close yesterday’s trading session at $197.40.

NXPI’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. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has an A grade for Growth, and a B grade for Sentiment. Click here to access NXPI’s ratings for Stability, Momentum, Quality, and Value as well.

NXP is ranked #20 of 98 stocks in the B-rated Semiconductor & Wireless Chip industry.

Corning Incorporated (GLW)

GLW manufactures specialty glass and ceramics. Its segments include Display Technologies, Optical Communications, Environmental Technologies, Specialty Materials, and Life Sciences. Its offerings include glass substrates for liquid crystal displays and organic light-emitting diodes used in televisions, notebook computers, desktop monitors, and tablets, among others.

The company’s net sales surged 37.6% year-over-year to $3.29 billion for its fiscal first quarter, ended March 31, 2021. GLW’s net income for the quarter was  $599 million, compared to a $96 million loss in the prior-year period. Its non-GAAP EPS was  $0.45, which represents a 125% year-over-year rise. Its revenue and EBITDA increased at CAGRs of 6% and 6.1%, respectively, over the past three years.

Analysts expect GLW’s revenue to increase 19.8% year-over-year to $13.72 billion in  2021. Its EPS is expected to increase 104% year-over-year to $0.51 for the current quarter, ending June 30, 2021. It surpassed the Street’s EPS estimates in each of the trailing four quarters.

On June 3, 2021, GLW introduced its latest innovation—Corning SMF-28 Contour optical fiber—which is expected to help telecommunications operators address the ever-expanding number of connected devices, the build-out of 5G networks, and advances in cloud computing. The stock has rallied 51.3% over the past year to close yesterday’s trading session at $40.15.

GLW’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. It also has a B grade for Growth, Momentum, and Quality.  In addition to these ratings, one can see GLW’s ratings for Stability, Value, and Sentiment here.

GLW is ranked #14 of 44 stocks in the A-rated Industrial-Manufacturing industry.

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NXPI shares were trading at $199.17 per share on Wednesday afternoon, up $1.77 (+0.90%). Year-to-date, NXPI has gained 25.98%, versus a 13.98% rise in the benchmark S&P 500 index during the same period.

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