tl;dr
Even with “some hurdles in the outlook,” State Street Global Advisors still see multiple reasons for liking the technology sector (NYSEARCA:XLK), according to a Sector & Equity Compass Report for Q2. The sector has been dominating flows for 18 months, up 31.36% from a year ago. “We continue to see s...
Even with “some hurdles in the outlook,” State Street Global Advisors still see multiple reasons for liking the technology sector (NYSEARCA:XLK), according to a Sector & Equity Compass Report for Q2. The sector has been dominating flows for 18 months, up 31.36% from a year ago. “We continue to see significant developments from generative AI: customization of large language models, more multimodal LLMs, including Sora (a text to video generation application), and the launch of virtual agents,” the report said. The Advisors’ assessment of the sector explains that FOMO has been driving companies to employ AI to help their businesses through back-end fulfillment, customer service, and other creative uses, rising the demand for advanced semiconductor chips and other technologies. Nvidia (NVDA) is a clear leader, “having sealed their dominant position with the new Blackwell platform to create even more powerful and efficient GPU chips,” analysts said. Competitors include Advanced Micro Devices (AMD), Intel (INTC), Qualcomm (QCOM), and Broadcom (AVGO), “all of which are in the U.S. IT sector, so taking a basket-approach to investing in these stocks is attractive.” In addition, relatively few AI adopters keep their own infrastructure, so they have a greater reliance on cloud provisions for computers and the storage necessary for their AI applications, analysts said. Surely, the largest hyper-scaler is Microsoft (MSFT). “Double-edged sword” hurdles for the sector include cybersecurity threats and privacy risks. Cybersecurity companies, such as Palo Alto Networks (PANW), are beneficiaries. Another risk for the sector is geopolitical threats to the AI chip supply chain, including China-Taiwan tensions. ASML Holding (ASML) is the world's only supplier of extreme ultraviolet lithography machines, which can make chips on a minute scale. Other hurdles may include regulation. Apple (AAPL) is facing anti-trust cases in the U.S. and Europe. “U.S. Technology (XLK) is just one of two sectors with earnings estimate upgrades throughout Q1,” analysts said. “Despite returns of over 8%, valuations did not widen against the rest of the market, premium growth can justify premium ratings.” Top global holdings: Microsoft Corp. (MSFT), Apple (AAPL), Nvidia (NVDA), Broadcom Inc. (AVGO), ASML Holding NV (ASML). Other top U.S. holdings: Salesforce Inc. (CRM).
More about NVIDIA Corporation
NVIDIA Corporation Summary
NVIDIA Corporation is an American multinational technology company incorporated in Delaware and based in Santa Clara, California. It designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market.
Industry: Manufacturing, Semiconductors & Related Devices
Market Cap: $211.68 billion
Current Price: $70.91
Change: 0.16
PE Ratio: 11.94
EPS: 24.68
Dividend Yield: 0.488%
Revenue: $60.92 billion
Net Income: $944.66 million
Profit Margin: 7.61%
ROE: 2.653
More about Advanced Micro Devices Inc
Advanced Micro Devices, Inc. (AMD) is an American multinational semiconductor company based in Santa Clara, California, that develops computer processors and related technologies for business and consumer markets. AMD's main products include microprocessors, motherboard chipsets, embedded processors, and graphics processors for servers, workstations, personal computers, and embedded system applications.
Industry: Manufacturing, Semiconductors & Related Devices
Market Cap: 250.63B
Current Price: $292.6
Dividend Yield: None
P/E Ratio: 0.53
EPS: 14.05
Beta: 0.0377
Volume: 22,680,001,000
52-Week High: $180.61
52-Week Low: $48.69
ROI: 0.102
More about Intel Corporation
Company: Intel Corporation
Description: American multinational corporation and technology company headquartered in Santa Clara, California, in Silicon Valley. It is the world's largest semiconductor chip manufacturer by revenue, and is the developer of the x86 series of microprocessors, the processors found in most personal computers (PCs).
Industry: Manufacturing, Semiconductors & Related Devices
Market Cap: 149.16 billion
Current Price: $87.6
Change: $0.74 (0.4%)
PE Ratio: 12.94
EPS: $0.0312
Revenue: $54.23 billion
Dividend Yield: 41.9 (-0.717%)
Beta: 0.097
More about Qualcomm Incorporated
Qualcomm Incorporated Summary Qualcomm Incorporated
Qualcomm is an American multinational corporation headquartered in San Diego, California, and incorporated in Delaware. It creates semiconductors, software, and services related to wireless technology. It owns patents critical to the 5G, 4G, CDMA2000, TD-SCDMA, and WCDMA mobile communications standards.
Industry Information
Industry: Manufacturing, Radio & TV Broadcasting & Communications Equipment
Financial Data
Market Cap: $180.17 billion
PE Ratio: 23.0
EPS: $3.15
EBITDA: $7.02 billion
Dividend Yield: 3.53%
Revenue: $32.53 billion
Gross Profit: $21.4 billion
Operating Income: $36.29 billion
Net Income: $15.877 billion
Debt to Equity: 0.245
Current Ratio: 0.05
More about Broadcom Inc
Broadcom Inc
Broadcom Inc. is an American designer, developer, manufacturer and global supplier of a wide range of semiconductor and infrastructure software products. Broadcom's product offerings serve the data center, networking, software, broadband, wireless, and storage and industrial markets.
Industry: MANUFACTURING, SEMICONDUCTORS & RELATED DEVICES
Market Cap: 583.44 billion
Current Price: $46.73
PE Ratio: 19.7
EPS: 26.94
52-Week High: $91.77
52-Week Low: $0.299
Volume: 38,864,998,000
Average Volume: 1,433.49
Dividend Yield: 1.881
Beta (5Y Monthly): 0.164
More about Microsoft Corporation
Microsoft Corporation is an American multinational technology company known for its computer software, consumer electronics, and related services. Its notable products include the Microsoft Windows operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Additionally, it produces the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. As of 2020, Microsoft ranked No. 21 in the Fortune 500 list of the largest United States corporations by total revenue and was the world's largest software maker by revenue in 2016. It is also considered one of the Big Five companies in the U.S. information technology industry, alongside Google, Apple, Amazon, and Facebook.
Sector: Technology
Industry: Services-Prepackaged Software
Market Cap: 300.39B
Current Price: $36.49
Price Change: 2.86 ( 11.08%)
Percentage Change: 30.61%
PE Ratio: 0.363
Volume: 2.27583B
Shares Outstanding: 1.00B
Beta: 435.48
Dividend Yield: 0.332
EPS: 0.176
More about Palo Alto Networks Inc
Palo Alto Networks, Inc. provides cybersecurity platform solutions globally. The company is headquartered in Santa Clara, California.
Sector: Technology
Industry: Computer Peripheral Equipment
ISIN: NEC
Market Cap: 90836337000
Current Price: 43.52
Dividend Yield: None
EPS: 6.46
PE Ratio: 24.27
PEG Ratio: 0.302
Revenue: 7527400000
Net Income: 337.24
EBITDA: 18.56
Profit Margin: 0.193
More about ASML Holding NV ADR
ASML Holding NV ADR Summary
ASML Holding NV develops, produces, markets, sells and services advanced semiconductor equipment systems consisting of lithography, metrology and inspection related systems for memory and logic chip manufacturers. The company is headquartered in Veldhoven, the Netherlands.
Industry: TECHNOLOGY
Sector: SPECIAL INDUSTRY MACHINERY
Classification: NEC
ISIN: 375260086000
Current Price: $42.05
Change: 4.65
Percentage Change: 21.15%
EPS: 1.194
P/E Ratio: 0.272
Market Cap: 26,102,301,000
Volume: 1,065.23
52-Week Change: -0.372
52-Week Change %: -0.216%
More about Apple Inc
Apple Inc. Stock Analysis Apple Inc. Stock Analysis Summary
Apple Inc. is an American multinational technology company that specializes in consumer electronics, computer software, and online services. It is the world's largest technology company by revenue, totaling $274.5 billion in 2020, and is currently the world's most valuable company since January 2021. As of 2021, Apple is the world's fourth-largest PC vendor by unit sales and the fourth-largest smartphone manufacturer. It is also one of the Big Five American information technology companies, along with Amazon, Google, Microsoft, and Facebook.
Key Statistics
- Sector: Technology
- Subsector: Electronic Computers
- Market Cap: $2.579 trillion
- P/E Ratio: 25.98
- EPS: 0.95
- Beta: 1.43
- Dividend (Yield): $0.832 (0.60%)
- Earnings Date: April 28, 2022
- Forward Dividend & Yield: $0.88 (0.62%)
- Ex-Dividend Date: February 4, 2022
More about Salesforce.com Inc
Salesforce.com Inc Summary
Salesforce.com, Inc. is an American cloud-based software company headquartered in San Francisco, California. It provides customer relationship management (CRM) service and also provides a complementary suite of enterprise applications focused on customer service, marketing automation, analytics, and application development.
Industry: TECHNOLOGY
Sector: SERVICES-PREPACKAGED SOFTWARE
Market Cap: $263.76 billion
Current Price: $64.9
Dividend Yield: 0%
EPS: 4.19
P/E Ratio: 35.79
Beta (5Y Monthly): 0.119
Revenue: $34.85 billion
Net Income: $312.4 million
Debt to Equity: 4.952
Quick Ratio: 0.108
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