3 Hot Tech Stocks To Buy After Solid Earnings

Tech sector earnings are entering their heaviest period and there’s sure to be much to say about them. One thing’s for sure, this should be a big quarter for many players because a truly large number of companies have benefited from the pandemic-induced changes in behavior. In this blog, I’ve highlighted results for three companies and said why these stocks are worth picking up-

ASML Holding N.V. (ASML - Free Report)

ASML is a leading provider of advanced technology systems for all the major global semiconductor manufacturers. It designs, develops, integrates, markets, and services these advanced systems so customers can make integrated circuits for application across electronic, communications, and other information technology markets.

Headline numbers for the June quarter: Earnings of $1.97 topped the Zacks Consensus Estimate of $1.89. Revenue of $3.66 billion was also ahead of the estimated $3.54 billion.

Highlights of the quarter: The transition to EUV tools that facilitate manufacturing on smaller nodes has essentially insulated the company from any major impact from COVID. Barring the initial period of supply delays and increased absenteeism, things are proceeding normally and production is more or less back to normal levels.

Management commentary centers on how demand from logic customers remains strong, while memory customers appear to be coming back. China, which contributed 23% of revenue in the last quarter, is expected to remain strong through the rest of the year with minimal impact from new U.S. export rules.

Capacity continues to be ramped up even as cycle times are reduced. As a result management expects the company to ship higher volumes in the second half than in the first with further increases in 2021.

Since EUV tools are also related to higher service revenue, the growing installed base is expected to bring a corresponding upward trend in these revenues. The company continues to invest in the remote diagnostics and augmented reality tools that enabled it to service customers more effectively during the lockdown.    

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