5 Nasdaq-Based Tech Stocks That Have Returned More Than 50% YTD

Image: Shutterstock

The Nasdaq composite continued its upward momentum on Jun 23, closing at a record high of 14,271.73, primarily driven by a rally in Tesla (TSLA Quick Quote TSLA - Free Report) shares after the electric vehicle-maker announced the opening of its solar charging station with embedded power storage capacity in Lhasa.

Moreover, strong U.S. factory activity in June, per data available from IHS Markit, helped boost investor sentiments.

Markedly, the Federal Reserve’s hawkish tone to control inflation fears had spooked investors last week. The central bank is now expected to make its first interest-rate hike in 2023 instead of 2024.

Higher inflation means increased borrowing costs as well as input costs. As a majority of tech companies rely on borrowing to expand their businesses, a higher inflation rate is detrimental to their prospects.

However, recent remarks of U.S. Federal Reserve Chairman Jerome Powell, which highlighted that the central bank would consider a broad set of economic and labor market data before raising interest rates, soothed investor's nerves and drove growth stocks, particularly from the tech sector.

Tech Momentum to Continue

Tech stocks have been on the rise driven by changing consumer preferences and behavior. The sector has been benefiting from the ongoing digitalization. Adoption of cloud computing and the integration of AI and machine learning have been key catalysts.

Moreover, rapid adoption of a hybrid work environment is expected to keep demand for PCs and laptops high. The work-from-home set-up continues to boost demand for cloud-based video conferencing, web conferencing, teleconferencing as well as workspace communication and collaboration solutions.

Moreover, the short supply of chips is opening up opportunities for semiconductor companies. Notably, the U.S. Senate has passed a bill that allocates $52 billion for the American semiconductor industry in an attempt to bolster chip manufacturing as well as improve competitive prowess against China.

Here we discuss five Nasdaq-listed stocks that are up more than 50% year to date and have room for further growth. They also have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). 

Per the Zacks proprietary methodology, stocks with such a perfect mix of elements offer solid investment opportunities.

Year-to-Date Performance

Zacks Investment Research

Image Source: Zacks Investment Research

Top Performers

Transcat (TRNS Quick Quote TRNS - Free Report) is riding on strong demand for its accredited calibration, repair, inspection, and laboratory instrument services. Recovery in industrial (accounts 48% of service revenues) and Life Science (accounts 48% of service revenues) end-markets bodes well for the company. Organically, the service segment is expected to grow in the mid-to-high single-digit range while acquisitions are anticipated to drive double-digit growth.

Transcat currently flaunts a Zacks Rank of 1 and a Growth Score of B. The Zacks Consensus Estimate for its fiscal 2022 earnings is pegged at $1.42 per share, having been raised 12.7% in the past 60 days. Shares have returned 60.2% year to date.

Ultra Clean Holdings (UCTT Quick Quote UCTT - Free Report) shares have returned 66.9% year to date. The company is benefiting from an expanding clientele. Robust demand for its part cleaning, surface encapsulation, and high sensitivity micro contamination analysis solutions is a key catalyst. The company is winning market share in the weldments and thermal solutions markets.

Ultra Clean currently carries a Zacks Rank of 2 and a Growth Score of A. The consensus mark for its 2021 earnings is pegged at $2.86 per share, having moved 10.3% north in the past 60 days.

EMCORE (EMKR Quick Quote EMKR - Free Report) is benefiting from strong demand for Cable TV optical components and sensing product lines from broadband customers. Notably, this Zacks #2 Ranked company is a leading provider of advanced mixed-signal devices for aerospace & defense systems and high-speed broadband communication networks.

EMCORE has a Growth Score of A. The Zacks Consensus Estimate for its fiscal 2021 earnings is pegged at 63 cents per share, having been revised 28.6% upward in the past 60 days. Shares have returned 88.6% year to date.

Cambium Networks (CMBM Quick Quote CMBM - Free Report) shares have returned 92.4% year to date. This wireless solutions provider is benefiting from solid demand for wireless broadband connectivity. Cambium’s 5G 28 GHz millimeter wave products are likely to boost its operations in the global market.

Cambium carries a Zacks Rank #2 and a Growth Score of B. The consensus mark for its 2021 earnings is pegged at $1.44 per share, up 13.4% over the past 60 days.

Perficient (PRFT Quick Quote PRFT - Free Report) shares have returned 69.7% year to date. This digital consultancy provider has a Zacks Rank #2 and Growth Score of B.

The company is riding on an expanding customer base. Strong demand for Perficient’s global delivery model (40% of delivery resources are currently offshore) has been a key catalyst. Markedly, in first-quarter 2021, the company booked 92 deals greater than $500K compared with 71 deals in the year-ago quarter and 70 in the previous quarter. Moreover, the acquisition of Productora de Software S.A.S. (PSL) has helped the company expand in Latin America.

The Zacks Consensus Estimate for its 2021 bottom line is pegged at $3.12 per share, up 6.1% in the past 60 days.

Disclaimer: Neither Zacks Investment Research, Inc. nor its Information Providers can guarantee the accuracy, completeness, timeliness, or correct sequencing of any of the Information on the Web ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.