So far, 2022 has been a rough year for technology stocks. Investors’ concerns over the Federal Reserve’s tighter monetary policy to fight multi-decade high inflation, the Russia-Ukraine war, and the possibility of an economic slowdown have driven a broad sell-off in tech stocks. This is evident in the benchmark Nasdaq composite index’s 22.5% decline year-to-date.
However, the recent tech sell-off provides a golden buying opportunity for investors because many quality stocks are now trading at attractive valuations. The tech sector is well-positioned to rebound this year, driven by solid demand amid growing tech dependence and the adoption of new and advanced technologies, including 5G, cloud computing, artificial intelligence (AI), and virtual reality (VR). Furthermore, increased corporate and government investments should boost the industry’s growth. According to Gartner, Inc. (IT), worldwide IT spending is expected to hit $4.4 trillion, up 4% year-over-year.
Given the bright growth prospects, we think it could be wise to invest in the stocks of quality tech companies Nokia Oyj (NOK), Amkor Technology, Inc. (AMKR), Toshiba Corporation (TOSYY), Intel Corporation (INTC), and Dell Technologies Inc. (DELL), which have the potential to rebound in price soon.
Nokia Oyj (NOK)
Headquartered in Espoo, Finland, NOK provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Mobile Networks; Network Infrastructure; Cloud and Network Services; and Nokia Technologies. It provides products and services for radio access networks. In addition, it offers fixed networking solutions, IP routing solutions, business applications software, cloud and cognitive services, and enterprise solutions.
On May 30, NOK strengthened its partnership with Microsoft Corp. (MSFT) to unlock the potential of mission-critical applications for Industry 4.0 use cases. NOK plans to integrate Microsoft Azure Arc capabilities into the Nokia MX Industrial Edge (MXIE) platform. Through this integration, Nokia MXIE and private wireless solution customers have access to the full Azure ecosystem offering on MXIE.
On May 26, NOK was selected by Taiwan Mobile (TWM) in an expansion deal to enhance the operator’s 5G coverage across the country. Under the agreement, NOK will provide its energy efficient AirScale portfolio to support TWM’s sustainability commitments. In addition, NOK will expand its existing 5G Standalone Core, including slicing and low-latency edge cloud for enterprise and Voice over New Radio (VoNR) at TWM.
NOK's net sales increased 5.4% year-over-year to €5.35 billion ($5.35 billion) in its fiscal 2022 first quarter, ended March 31, 2022. Its gross profit improved 12.7% from its year-ago value to €2.17 billion ($2.32 billion). The company’s current assets and total assets amounted to €19.47 billion ($20.83 billion) and €40.53 billion ($43.37 billion), respectively, registering an increase of 7.4% and 10% year-over-year. In addition, its net cash and interest-bearing financial investments rose 32.9% year-over-year to €4.90 billion ($5.24 billion).
The $0.11 consensus EPS estimate for its fiscal 2022 third quarter, ending Sept. 30, 2022, represents a 14.7% improvement from the same period last year. The company has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
The stock has decreased 17.8% in price year-to-date and closed yesterday’s trading session at $5.09.
NOK's POWR Ratings reflect this promising outlook. It has an overall B grade, which equates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
NOK has an A grade for Value. Within the Technology - Communication/Networking industry, it is ranked #11 of 54 stocks.
To see additional POWR Ratings (Stability, Momentum, Sentiment, Growth, and Quality) for NOK, click here.
Amkor Technology, Inc. (AMKR)
AMKR in Tempe, Ariz., provides outsourced semiconductor packaging and test services in the U.S., Japan, Europe, the Middle East, Africa, and the Asia Pacific. The company offers turnkey packaging and test services and flip chip-scale package products for use in mobile consumer electronic devices. In addition, it provides wafer-level CSP packages and lead frame packages used in electronic devices.
In its fiscal 2022 first quarter, ended March 31, 2022. AMKR's net sales increased 20.4% year-over-year to $1.60 billion. Its operating income improved 45.4% year-over-year to $210.01 million. The company’s EBITDA rose 29.6% year-over-year to $363 million. In addition, its net income attributable to Amkor and net income attributable to Amkor per common share came in at $170.66 million and $0.69, respectively, registering a rise of 42.4% and 40.8% from the prior-year period.
Analysts expect AMKR’s revenue for its fiscal 2022 third quarter, ending Sept. 30, 2022, to come in at $1.81 billion, indicating a 7.5% increase year-over-year. Also, the $0.84 consensus EPS estimate for the next quarter represents a 13.5% rise from the prior-year period. It is no surprise that it has topped the consensus revenue estimates in each of the trailing four quarters.
Shares of AMKR have declined 15.2% in price year-to-date and closed yesterday’s trading session at $20.99.
AMKR's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B grade, which translates to Buy in our proprietary rating system.
AMKR has an A grade for Value and a B grade for Sentiment. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #23 of 95 stocks.
To see additional POWR Ratings (Growth, Momentum, Stability, and Quality) for AMKR, click here.
Click here to checkout our Semiconductor Industry Report for 2022
Toshiba Corporation (TOSYY)
TOSYY provides electronic devices and storage solutions worldwide. It is headquartered in Tokyo, Japan. The company operates through seven segments: Energy Systems and Solutions; Infrastructure Systems and Solutions; Building Solutions; Retail and Printing Solutions, Electronic Devices and Storage Solutions; Digital Solutions; and Other.
On April 27, TOSYY and BT, along with EY, launched a trial of the world's first commercial quantum-secured metro network. Shunsuke Okada, TOSYY’s Corporate Senior Vice President and Chief Digital Officer, said, “Combining BT's leadership in networks technologies and Toshiba's leadership in quantum technologies has brought this network to life, allowing businesses across London to benefit from quantum secured communications for the first time.”
On March 29, TOSYY and KT Corporation (KT) collaborated on two pilot projects in South Korea using Quantum Key Distribution (QKD). The first project is to evaluate the quality of service (QoS) on a long-distance hybrid QKD network built with different QKD systems. The second project covers the testbed for an open QKD service that aims to expand the quantum industry ecosystem in South Korea and abroad. This collaboration is expected to boost the company’s growth and profitability.
For its fiscal year 2022 ended March 31, 2022, TOSYY’s net sales increased 9.3% year-over-year to $27.35 billion. Its operating income improved 52.2% from the previous year to $1.30 billion. Its income from continuing operations, before income taxes and noncontrolling interests, rose 55.8% year-over-year to $1.96 billion. Its net income and earnings per share attributable to shareholders of the company came in at $1.60 billion and $3.62, respectively, registering a rise of 70.8% and 75.9% year-over-year.
Analysts expect TOSYY’s revenue for its fiscal 2023 ending March 30, 2023, to be $26.30 billion, indicating a 3,834% increase from the last year. The company has an impressive revenue surprise history; it has surpassed the consensus revenue estimates in three of the trailing four quarters.
The stock has declined marginally over the past five days to close yesterday’s trading session at $22.95.
TOSYY's POWR Ratings reflect a strong outlook. The stock has an overall B rating, which translates to Buy in our POWR Ratings system.
TOSYY has an A grade for Value and B for Stability. It is ranked #9 of 45 stocks in the Technology - Hardware industry.
Click here to see TOSYY's POWR Ratings for Growth, Momentum, Sentiment, and Quality.
Intel Corporation (INTC)
INTC in Santa Clara, Calif., designs, manufactures, and sells computer products and technologies worldwide. The company operates through seven segments: CCG; DCG; IOTG; Mobileye; NSG; PSG; and All Other. It provides platform products, including central processing units and chipsets, multichip packages, non-platform products, such as accelerators, boards and systems, and connectivity and storage products.
Last month, INTC introduced an open-source tool to migrate code to SYCL through a project called SYCLomatic. This open-source project assists developers in creating portable heterogeneous code and enables community collaboration to advance the adoption of the SYCL standard.
On March 31, INTC announced an agreement to acquire Granulate Cloud Solutions Ltd., an Israel-based developer of real-time optimization software. Through this acquisition, Granulate’s autonomous optimization software might help drive greater performance and ROI in the cloud and data center and boost the company’s business growth.
INTC's operating income increased 17.5% year-over-year to 4.34 billion in its fiscal 2022 first quarter, ended April 2, 2022. Its income before taxes grew 147.3% from its year-ago value to 9.66 billion. The company’s net income and earnings per share amounted to $8.11 billion and $1.98, respectively, registering an increase of 141.4% and 141.5% year-over-year.
The Street expects the company's revenue for its fiscal 2022 third-quarter, ending Sept. 30, 2022, to increase 5.6% from the same period in 2021. It has topped the consensus revenue estimates in three of the trailing four quarters, and the consensus EPS estimates in each of the trailing four quarters.
The stock has plunged 11.6% in price year-to-date and 19.7% over the past year and closed yesterday’s trading session at $44.84.
INTC's strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of B, which translates to Buy in our proprietary rating system.
INTC has a grade of A for Value and B for Momentum and Quality. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #18 of 95 stocks.
To see additional POWR Ratings (Growth, Stability, and Sentiment) for INTC, click here.
Click here to checkout our Semiconductor Industry Report for 2022
Dell Technologies Inc. (DELL)
DELL designs, develops, manufactures, and sells information technology (IT) solutions, products, and services worldwide. The Round Rock, Tex., company operates through three segments: Infrastructure Solutions Group (ISG); Client Solutions Group (CSG); and VMware. It offers storage solutions, networking products and services, third-party software and peripherals, and warranty services.
In May, DELL strengthened its APEX portfolio with managed services for cyber recovery on-premises and in public clouds. With Project Alpine, DELL demonstrated software-defined storage in public clouds. The company has also collaborated with Snowflake Inc. (SNOW) to the extent of its SaaS ecosystem. It helps connect data from on-premises Dell enterprise storage with the Snowflake Data Cloud. These developments might extend the company’s customer reach and boost revenue streams.
In its fiscal 2023 first quarter ended April 29, 2022, DELL’s non-GAAP net revenues increased 15.6% year-over-year to $26.12 billion. The company’s non-GAAP operating income rose 20.6% year-over-year to $2.14 billion. Its non-GAAP net income and non-GAAP earnings per share came in at $1.43 billion and $1.84, respectively, registering a rise of 35.9% and 36.3% from the prior-year period.
Analysts expect DELL’s revenue for its fiscal year 2023, ending Jan. 31, 2023, to be $108.13 billion, indicating a 6.8% increase year-over-year. Also, the $7.07 consensus EPS estimate for the current year represents a 13.7% rise from last year. DELL has surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has slumped 8.1% in price year-to-date and closed yesterday's trading session at $51.28.
DELL's POWR Ratings reflect a strong outlook. The stock has an overall B rating, which translates to Buy in our POWR Ratings system.
DELL has an A grade for Value. It has a B grade for Sentiment and Growth. It is ranked #8 of 45 stocks in the Technology - Hardware industry.
Click here to see DELL's POWR Ratings for Momentum, Stability, and Quality.
NOK shares were trading at $5.02 per share on Friday afternoon, down $0.07 (-1.38%). Year-to-date, NOK has declined -19.08%, versus a -13.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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