The past few weeks have seen technology stocks outperform. Over the past month (at Monday’s closing price), the and tech-heavy indices have gained +5.11% and +5.29% respectively, while the has limited its gains to +3.11% and the to +1.69%.
Recent weeks have brought several positive developments for the technology sector, including the rate cut. Technology stocks usually perform well when interest rates are cut, and the market anticipates the US central bank will implement two more rate cuts by year’s end.
It should also be remembered that massive investments by and in , whose announcement led to a gain of over 40% for the share over the last two weeks, have boosted many chip industry stocks.
Technology stocks could therefore outperform over the coming weeks, especially as the positive seasonality of Q4, which is about to kick off, also favors an optimistic mood in which tech is used to being particularly comfortable.
5 criteria to find the 8 best tech stocks to buy now
So, using the Investing.com screener, we set out to identify the best US tech stocks to watch for further upside, starting by extracting US tech stocks with a market capitalization of over $10 billion, thus arriving at a core list of 178 stocks.
Next, we targeted stocks that were undervalued relative to their fundamental value, based on Fair Value, an InvestingPro proprietary tool that synthesizes several recognized valuation models. Specifically, we chose to retain only those stocks with a potential upside of over +20% according to Fair Value.
Our research also took into account the solidity of companies’ finances, thanks to another InvestingPro exclusive indicator, the Health Score, which is based on several key financial metrics. We excluded companies with a score of less than 2.5/5.
Finally, we’ve also ensured that we target stocks favored by analysts, excluding those with an upside potential of less than 20% according to the average analysttarget.
Below is a complete list of the five screener filters used in this research:
WARNING: Although the basic screener functions are available free of charge, this search used metrics reserved for InvestingPro members, Pro+ plan.
With these parameters applied to the US market, we were able to identify eight potential opportunities:
These stocks have a potential upside of 21.6% to 33.2% according to InvestingPro’s Fair Value. Analysts’ average targets for these stocks translate into upside potential of between +21.8% and +41.8%.
It’s also worth noting that these companies. However, all from the technology sector, have very diverse businesses (software, communications, e-commerce, etc.), making this list a source of interesting opportunities for most investors at the dawn of a Q4 that could prove explosive for big US technology stocks.
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