As we approach the year-end, the tech sector is once again grabbing the attention of investors, with the leading companies positioning themselves for a strong rally. Mega-cap tech firms, which drive innovation and global digital adoption, are now expected to deliver substantial gains. Therefore, you might consider watching three tech titans, namely, Meta Platforms, Inc. (META), Oracle Corporation (ORCL), and QUALCOMM Incorporated (QCOM).
Following a year marked by volatility, tech giants are reaping the benefits from improving economic sentiment, easing inflation, and the Federal Reserve’s dovish stance. These favorable conditions are encouraging investors to reallocate funds into growth sectors, with technology being the primary emphasis. Tech giants are committed to investing in AI, believing that long-term benefits will outweigh the short-term costs.
According to the Computing Technology Industry Association's (CompTIA) report, tech jobs in the U.S. are anticipated to grow at twice the rate of the overall workforce, reaching 7.1 million in 2034.
Tech titans, including companies leading in AI, cloud computing, and semiconductors, are experiencing a resurgence in demand. AI adoption has unlocked massive opportunities for big tech, while advancements in 5G and cloud services are further solidifying their growth trajectories.
AI agents are poised to transform the workforce by fusing machine efficiency and human creativity to produce unprecedented levels of innovation and productivity. The rapid adoption of these innovations across industries continues to support strong fundamentals in the tech space.
With that in mind, let’s delve into the fundamentals of the above-mentioned stocks.
Meta Platforms, Inc. (META)
META engages in the development of products globally that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables. It operates in two segments: Family of Apps and Reality Labs.
On December 5, buoyed by strong financial performance, the company declared its quarterly dividend of $0.50 per share, payable to its shareholders on December 27, 2024. META pays an annual dividend of $2, which translates to a yield of 0.32% at the current share price. Its four-year average dividend yield is 0.04%.
During the third quarter that ended on September 30, META’s revenue increased 18.9% year-over-year, amounting to $40.59 billion. It posted income from operations of $17.35 billion, indicating a 26.2% increase from the prior-year quarter.
In addition, META’s net income stood at $15.68 billion, up 35.4% year-over-year, while its earnings per share grew 37.4% from the year-ago value to $6.03. Its adjusted free cash flow rose 13.8% from the year-ago value to $15.52 billion.
The consensus revenue estimate of $46.98 billion for the fiscal fourth quarter (ending December 2024) represents a 17.1% increase year-over-year. The consensus EPS estimate of $6.74 for the same quarter indicates a 26.5% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
META shares have surged 86.4% over the past year and 76.4% year-to-date to close the last trading session at $624.24.
META’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
META has an A grade for Sentiment and Quality. It is ranked #16 out of 52 stocks in the A-rated Internet industry. Click here to see the additional ratings for META (Growth, Value, Momentum, and Stability).
Oracle Corporation (ORCL)
ORCL offers products and services that address enterprise information technology environments worldwide. It provides cloud software applications, cloud-based industry solutions, application licenses, infrastructure technologies, databases, Java, middleware, hardware products, and consulting and customer services.
On October 30, ORCL launched Oracle Analytics Intelligence for Life Sciences, the AI-powered, cloud-scale data and analytics platform streamlines that will help accelerate insight generation by unifying disparate data sets into a single, intelligent workbench. This launch will help advance insights and therapies quickly and precisely, delivering the tools and intelligence.
On October 29, ORCL’s Health unveiled a new version of its Clinical AI Agent built on the latest generative AI technology, providing a comprehensive set of advanced AI services for medical providers. This technology will help improve patient-provider interactions by combining comprehensive clinical intelligence with a multimodal voice user interface to automate and unify a variety of clinical workflows.
In the fiscal second quarter that ended on November 30, 2024, ORCL’s revenue increased 8.6% year-over-year to $14.06 billion. The company reported a non-GAAP operating income of $6.09 billion, indicating a 10.1% increase from the prior-year quarter with an operating margin of 30% (up 200 bps year-over-year).
ORCL’s non-GAAP net income came in at $4.21 billion, up 11.8% year-over-year, while its non-GAAP net income per share grew 9.7% from the year-ago value to $1.47.
Analysts expect ORCL’s revenue for the third quarter ending February 2025 to increase 8.4% year-over-year to $14.39 billion, while its EPS for the same period is expected to grow 5.9% from the prior-year quarter to $1.49. The company surpassed Street revenue and EPS estimates in three of the trailing four quarters, which is promising.
Shares of ORCL have surged 65.7% year-to-date and 36.4% over the past nine months to close the last trading session at $171.23.
ORCL’s fundamentals are reflected in its POWR Ratings. The stock has a B grade for Stability. It is ranked #47 out of the 126 stocks in the Software - Application industry.
Beyond what is stated above, we’ve also rated ORCL for Growth, Value, Momentum, Sentiment, and Quality. Get all ORCL’s ratings here.
QUALCOMM Incorporated (QCOM)
QCOM engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).
On October 24, QCOM collaborated with Mistral AI to bring Mistral AI’s new state-of-the-art generative AI models, Ministral 3B and Ministral 8B, to devices powered by Snapdragon. This collaboration of generative AI is compact and powerful and should enable the devices to have other benefits, like reliability, enhanced privacy, and cost efficiency.
In the same month, QCOM announced a collaboration with Google. This strategic collaboration will allow Snapdragon Digital Chassis and Google’s in-vehicle technologies to deliver a standardized reference framework for the development of generative AI-enabled digital cockpits and software-defined vehicles (SDV).
QCOM’s revenues for the fourth quarter (ended September 29, 2024) increased 18.7% year-over-year to $10.24 billion. The company reported a non-GAAP operating income of $3.51 billion, indicating a 31.4% growth from the prior year’s quarter. QCOM’s non-GAAP net income came in at $3.04 billion, up 33.3% year-over-year, while its net income per share grew 33.2% from the prior-year quarter to $2.69.
Street expects QCOM’s revenue for the fiscal first quarter (ending December 2024) to increase 10.4% year-over-year to $10.96 billion. Moreover, its EPS estimate of $2.95 for the same period indicates a 7.4% year-over-year growth. In addition, it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is excellent.
Over the past year, the stock has surged 10.3%, closing the last trading session at $157.89.
QCOM’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has an A grade for Quality and a B for Value. Within the Semiconductor & Wireless Chip industry, it is ranked first out of 90 stocks. Click here to see QCOM’s ratings for Growth, Momentum, Stability, and Sentiment.
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META shares were trading at $619.63 per share on Tuesday afternoon, down $4.61 (-0.74%). Year-to-date, META has gained 75.73%, versus a 28.15% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
