The global tech market is thriving due to the increased adoption of cloud computing, rising demand for cybersecurity, and higher IT expenditures. Further, the market is boosted by the accelerated adoption of technology during the pandemic, particularly for remote work and cybersecurity.
Therefore, investors could consider adding top tech stocks Dell Technologies Inc. (DELL), HP Inc. (HPQ), Logitech International S.A. (LOGI), Dropbox, Inc. (DBX), and Dolby Laboratories, Inc. (DLB) to one’s watchlist.
Consumer Technology Association projects a 2.8% growth in retail revenues for the U.S. consumer technology industry in 2024, reaching $512 billion, indicating increased consumer spending on technology products and services.
Moreover, spending on audio and video streaming continues to surge, accompanied by a gaming hardware boom and a 12% subscription services growth. Also, AI is set to impact over 230 million smartphones and PCs through generative AI applications this year.
In addition, the growth of the 5G technology market is transforming the electronics market through faster data speeds and capacity, low latency, and the growing demand for IoT devices, supported by infrastructure upgrades and government initiatives. The global 5G technology market is projected to grow at a CAGR of 40.1% to reach $1.80 trillion by 2030.
Moreover, the impact of Artificial Intelligence (AI) is expected to be felt in the technology sector this year. Additionally, digital marketplaces are expected to show their dominance, with 80% of sales interactions between suppliers and buyers to occur in digital channels by 2025. Furthermore, cloud platforms are projected to deliver business outcomes, with 50% of tech providers using industry cloud platforms by 2027.
Considering these conducive trends, let’s examine the fundamentals of five tech stock picks, beginning with the fifth one.
Dell Technologies Inc. (DELL)
DELL offers comprehensive solutions and products globally, specializing in infrastructure and client solutions. With a focus on both hardware and services, the company serves a wide range of customers across various regions.
On February 2, 2024, DELL paid a quarterly cash dividend of $0.37 per common share. The company pays $1.48 annually, which translates to a yield of 1.71% on the prevailing price level, higher than its four-year average dividend yield of 1%.
During the third quarter, which ended November 3, 2023, DELL reported a total net revenue of $22.25 billion. The company's non-GAAP operating expenses decreased 5% year-over-year to $3.31 billion. Its non-GAAP net income and EPS stood at $1.39 billion and $1.88, respectively.
DELL’s revenue and EPS are expected to grow 3.6% and 10.6% year-over-year to $21.67 billion and $1.45, respectively, for the fiscal first quarter ending April 2024. The company surpassed the EPS estimates in each of the trailing four quarters, which is notable.
Its shares have gained 102.1% over the past year and 91.5% over the past nine months to close the last trading session at $85.71.
DELL’s POWR Ratings reflect its promising prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
DELL has a B grade for Growth, Value, Momentum, and Sentiment. Within the A-rated Technology - Hardware industry, it is ranked #11 among 36 stocks.
To see DELL’s additional POWR Ratings for Stability and Quality, click here.
HP Inc. (HPQ)
HPQ is a multinational technology firm providing personal computing devices, printers, and associated services. With three primary segments, it caters to a diverse clientele spanning consumers, businesses, and various sectors globally.
In the fourth quarter ended October 31, 2023, HPQ reported net revenue of $13.82 billion. The company’s non-GAAP net earnings and earnings from operations grew 8.4% and 11.3% year-over-year to $902 million and $1.25 million, respectively. Its net earnings per share amounted to $0.97, compared to the previous-year quarter net loss per share of $0.02.
For the fiscal year 2024, the company projects its non-GAAP EPS to be in the range of $3.25 to $3.65. Additionally, HPQ expects to generate free cash flow in the range of $3.1 to $3.6 billion for the same year.
Street anticipates HPQ’s revenue to be $13.60 billion for the first quarter ended January 2024. Its EPS for the same quarter is expected to grow 8.5% year-over-year to $0.81. The company surpassed the EPS estimates in three of the trailing four quarters.
HPQ’s shares increased 5.6% over the past three months to close the last trading session at $28.33.
HPQ’s POWR Ratings reflect its optimistic prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
HPQ has an A grade for Value and a B for Growth, Momentum, and Quality. Within the Technology - Hardware industry, it is ranked #5.
In addition to the POWR Ratings stated above, one can access HPQ’s additional Stability and Sentiment ratings here.
Logitech International S.A. (LOGI)
LOGI is a global company known for its diverse product range, featuring pointing devices, keyboards, webcams, gaming accessories, and audio products. Catering to various consumer demands, it specializes in solutions for work, creativity, gaming, and streaming.
During the third quarter, which ended December 31, 2023, LOGI generated net sales of $1.26 billion. The company’s non-GAAP operating income and net income rose 21.6% and 30.3% year-over-year to $248.24 million and $241.49 million, respectively. Moreover, its non-GAAP net income per share grew 34.2% from the previous-year quarter to $1.53.
For the fiscal year 2024, the company expects its sales to be between $4.20 billion and $4.25 billion, and its non-GAAP operating income for the same fiscal year is likely to be in the range of $610 million to $660 million.
Analysts expect LOGI’s revenue to be $4.23 billion for the fiscal year ending March 2024. Its EPS for the same fiscal year is expected to grow 20.8% year-over-year to $3.89. The company surpassed the revenue and EPS estimates in each of the trailing four quarters.
The stock has gained 39.1% over the past year and 32.9% over the past nine months to close the last trading session at $84.18.
LOGI’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
LOGI has an A grade for Quality and a B for Growth, Momentum, and Sentiment. Within the Technology - Hardware industry, it is ranked #8 stocks.
Click here for LOGI’s additional Value and Stability ratings.
Dropbox, Inc. (DBX)
DBX provides a worldwide content collaboration platform, offering both free and paid subscription plans with premium features. It serves diverse industries, including professional services, technology, media, education, and finance.
DBX’s revenue grew 7.1% year-over-year to $633 million in the third quarter that ended September 30, 2023. For the same quarter, the company's non-GAAP income from operations and net income rose 21.9% and 26.8% from the year-ago quarter to $227.60 million and $194.10 million, respectively. Also, its non-GAAP net income per share increased 30.2% from the previous-year quarter to $0.56.
DBX’s revenue and EPS are expected to grow 7.4% and 24.7% year-over-year to $2.50 billion and $1.97, respectively, for the fiscal year ending December 2023. The company surpassed the revenue and EPS estimates in each of the trailing four quarters, which is notable.
Its shares have gained 62.2% over the past nine months to close the last trading session at $32.49. It gained marginally intraday.
DBX’s POWR Ratings reflect its sound prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
DBX has an A grade for Quality. Within the Technology - Services industry, it is ranked #6 among 76 stocks.
To see DBX’s additional POWR Ratings for Growth, Value, Momentum, Stability, and Sentiment, click here.
Dolby Laboratories, Inc. (DLB)
DLB pioneers audio and imaging technologies for various entertainment platforms, including cinemas, mobile devices, OTT services, and automobiles. Its wide range of products and services cater to film studios, content creators, broadcasters, and other segments of the entertainment industry globally.
On February 1, 2024, DLB declared a cash dividend of $0.30 per share of Class A and Class B common stock, payable on February 22, 2024. The company pays $1.20 annually, which translates to a yield of 1.52% on the prevailing price level, higher than its four-year average dividend yield of 1.20%.
The company has raised its dividend payouts at a CAGR of 8.1% and 10.6% over the past three and five years, respectively. Moreover, the company boasts a nine-year record for consecutive years of dividend growth.
In the fiscal first quarter, which ended December 29, 2023, DLB generated total revenue and operating income of $315.57 million and $66.22 million, respectively. The company reported non-GAAP net income and EPS of $98.64 million and $1.01.
As of December 29, 2023, its total liabilities amounted to $573.22 million, compared to its total liabilities of $607.58 million as of September 29, 2023.
For the second quarter of fiscal 2024, DLB expects total revenue between $345 million and $375 million. Also, its non-GAAP EPS for the same quarter is anticipated to range from $1.14 to $1.29.
Street expects its revenue and EPS to grow 5.1% and 40% year-over-year to $313.64 million and $0.77, respectively, for the fiscal third quarter ending June 2024. It surpassed EPS estimates in each of the four trailing quarters. Shares of DLB declined 1.6% intraday to close the last trading session at $78.97.
DLB’s positive outlook is reflected in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
DLB has an A grade for Quality. Within the B-rated Technology - Electronics industry, it is ranked #9 of 42 stocks.
Click here to access DLB’s additional Growth, Value, Momentum, Stability, and Sentiment ratings.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
DELL shares were trading at $82.37 per share on Tuesday afternoon, down $3.34 (-3.90%). Year-to-date, DELL has gained 8.15%, versus a 3.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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