5 tech stocks to explore as Fed hikes rate: MSFT, AAPL, NVDA, HPQ, AVGO - Kalkine Media

July 30, 2022 06:11 AM PDT | By Rupam Roy
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Highlights:

  • Microsoft Corporation's (NASDAQ: MSFT) revenue soared 12 per cent YoY in Q4 FY22.
  • Nvidia Corporation (NASDAQ: NVDA) holds a current yield of 0.09 per cent.
  • HP Inc. (NYSE: HPQ) fell more than 14 per cent this year.

Stocks of Microsoft Corporation (NASDAQ: MSFT), NVIDIA Corporation (NASDAQ: NVDA), Apple Inc. (NASDAQ: AAPL), etc. have been making headlines this week following the release of their financial results. 

This year, the tech sector came under pressure due to various macroeconomic concerns like elevated inflation, concerns over a cooling economy and, most recently, the latest rate hike on Wednesday, July 27. Some experts believe that the Fed Reserve's aggressive stance to bring down inflation could tip the economy into a recession.

How are these top tech stocks performing amid all this? Let's find out. 

5 top technology stocks and their YoY return

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Microsoft Corporation (NASDAQ: MSFT)

The US$-1.97 trillion market cap firm's revenue grew 12 per cent year-over-year (YoY) to US$ 51.9 billion in the fourth quarter of fiscal 2022. In constant currency, its revenue is said to have soared 16 per cent YoY.

Its operating income ticked up eight per cent YoY to US$ 20.5 billion in Q4 FY22. Microsoft's net income and earnings per share (EPS) diluted were US$ 16.7 billion and US$ 2.23 apiece, up two per cent and three per cent YoY, respectively.

For the fiscal year that ended on June 30, 2022, the technology giant reported revenue of US$ 198.3 billion, up 18 per cent YoY, and its net income jumped 19 per cent YoY to US$ 72.7 billion.

MSFT stock was up by 9.23 per cent from its 52-week low of US$ 241.51 (June 14, 2022) as of writing. Although the tech stock fell 7.88 per cent in one year and 21.51 per cent in 2022, it showed gains of 2.79 per cent this month.

As per Refinitive, Microsoft's Relative Strength Index (RSI) was 53.33 on July 28. An RSI between 0 to 30 indicates oversold, and 70 to 100 signifies overbought. On the other hand, the range 30-50 indicates volatility, and 50-70 suggests that the stock is in a stable state.

Apple Inc. (NASDAQ: AAPL)

One of the leaders in the technology sector, Apple's stock value increased by 5.13 per cent on an annual basis. However, this year, AAPL stock plummeted 13.16 per cent.

At its current price, the Cupertino, California-based company's stock was up 19.53 per cent from its 52-week low of US$129.04 (June 16, 2022). 

In the third quarter of fiscal 2022, the iPhone maker's total net sales of US$ 82.95 billion, up two per cent from US$ 81.43 billion in Q3 FY21.

Its net income also declined to US$ 19.44 billion, or US$ 1.20 per diluted share in Q3 FY22, from US$ 21.74 billion, or US$ 1.30 per diluted share in the third quarter that ended on June 26, 2021.

Nvidia Corporation (NASDAQ: NVDA)

Although NVDA stock lost 41.12 per cent year-to-date (YTD) and 9.85 per cent YoY, it provided gains of 14.22 per cent this month.

As of writing, it had surpassed its 52-week low of US$ 140.55 (July 5, 2022) by 23.23 per cent. It notched the 52-week high of US$ 346.47 in November 2022.

In July, the GPU manufacturer announced a unified computing platform that would help in advancements in quantum research and developments in artificial intelligence (AI), health, finance, and other fields.

Revenue of the Santa Clara, California-based firm jumped 46 per cent YoY to US$ 8.29 billion in Q1 FY23, buoyed by its data centre and gaming revenue. However, its net income witnessed a drop of 15 per cent YoY to US$ 1.61 billion, or US$ 0.64 per diluted share, in the first quarter of fiscal 2023.

HP Inc. (NYSE: HPQ)

The Palo Alto, California-based technology company holds an annualized dividend is US$ 1. The US$-33.26 billion market cap firm announced a cash dividend of US$ 0.25  on June 21 (payable on October 5).

In the second quarter of fiscal 2022, HP's GAAP net revenue climbed 3.9 per cent YoY to US$ 16.5 billion. It reported net earnings of US$ 1 billion, signifying a decline of 19 per cent YoY.

For the fiscal 2022 third quarter, HP expects its diluted net EPS to be between US$ 0.91 and US$ 0.96.

HPQ stock fell 14.58 per cent YTD while climbing 13.29 per cent YoY.

Broadcom Inc. (NASDAQ: AVGO)

The semiconductor manufacturing firm's stock has lost 21.50 per cent this year, but showed gains of 9.86 per cent YoY.

At the time of writing, AVGO stock crossed its 52-week low of US$ 462.66 (August 19, 2021) by 12.88 per cent. The San Jose, California-based company has an RSI of 57.67, as per Refinitive, which suggests that it could be in a stable condition.

The chipmaker's revenue was up 23 per cent YoY to US$ 8.10 billion in Q2 FY22. Its net income improved to US$ 2.59 billion, or US$ 5.93 per diluted share, from its Q2 FY21 net income of US$1.49 billion, or US$3.30 per diluted share.

Bottom line

The technology sector struggled the most this year as investors seemingly turned their focus to safer assets amid the market downturn. However, given the demand for their services, the sector is expected to bounce back in the coming quarters.

The S&P 500 fell 13.44 per cent YoY while gaining 5.64 per cent month-to-date (MTD). On the other hand, the tech-savvy Nasdaq Composite Index tumbled 24.06 YTD while gaining 7.74 per cent this month. 

The tech sector provides some essential services like software-as-a-service (SaaS), semiconductors, etc., whose demands are significantly up in recent times. 


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