Kalkine Media lists technology stocks to watch in October

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Kalkine Media lists technology stocks to watch in October

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 Kalkine Media lists technology stocks to watch in October
Image source: © Buchachon | Megapixl.com

Highlights:

  • Cadence Design Systems, Inc. (NASDAQ: CDNS) stock rose 11 per cent QTD.
  • Palo Alto Networks, Inc. (NASDAQ: PANW) revenue surged 27 per cent YoY in Q4 FY22.
  • Tower Semiconductor Ltd. (NASDAQ: TSEM) stock gained around 12 per cent YTD.

The technology sector is one of the largest segments in the equity market. The sector is comprised of some of the largest companies by market cap and hence, the performance of the sector generally had an impact on the overall market.

Some of the popular names from the US technology sector include Cadence Design Systems, Inc. (NASDAQ: CDNS), Palo Alto Networks, Inc. (NASDAQ: PANW), Synopsys, Inc. (NASDAQ: SNPS), Tower Semiconductor Ltd. (NASDAQ: TSEM), and Citrix Systems, Inc. (NASDAQ: CTXS). The companies seem to have gained traction in recent days due to their innovative operating models.

The ongoing tensions in the market are reflected in the recent performance of almost all the sectors in the stock market. The still-elevated inflation and the central bank's effort to fight it tooth and nail have hurt the sentiment of market participants in recent days.

The year 2022 has been rough so far, while the macroeconomic headwinds had forced traders to run for the hills. The dropping confidence of the investors is evidenced by the bearish sentiment in the market, which compelled several of them to sit on the sideline.

Now let's dive into the stock performance and financial highlights of the companies mentioned above, amid growing concerns about the stock market:

Cadence Design Systems, Inc. (NASDAQ: CDNS)

Cadence Design Systems is a computer software company with a P/E ratio of 59.85. The forward P/E one-year ratio of the US$ 45.59 billion market cap firm is US$ 50.44.

The stock of the software technology company lost more than 10 per cent YTD. However, in the last 12 months through September 29, it added over nine per cent while jumping more than 11 per cent QTD. The CDNS stock reached its 52-week high of US$ 194.97 on August 16, 2022, from which it traded about 14 per cent down on September 28.

Cadence Design Systems' revenue was US$ 857.52 million in Q2 FY22, compared to US$ 728.28 million in the year-ago quarter. The intelligent system design provider's net income was US$ 186.92 million in the fiscal 2022 second quarter, up from US$ 155.90 million in Q2 FY21.

Palo Alto Networks, Inc. (NASDAQ: PANW)

Palo Alto Networks is a cybersecurity firm with a forward one-year P/E ratio of 245.29. The company provides its platform with advanced firewalls and cloud-based offerings focused on cybersecurity.

The stock of the technology company decreased by more than 10 per cent YTD while adding over five per cent in one year. On a QTD basis through September 29, the PANW stock added about one per cent.

The cybersecurity company's fiscal 2022 fourth-quarter revenue jumped 27 per cent YoY to US$ 1.6 billion. The US$ 49.13 billion market cap firm's net income was US$ 3.3 million in Q4 FY22, against a loss of US$ 119.3 million in Q4 FY21.

Meanwhile, Palo Alto Networks' annual loss was US$ 267 million on revenue of US$ 5.50 billion in fiscal 2022. Its revenue in fiscal 2022 jumped 29 per cent YoY.

Synopsys, Inc. (NASDAQ: SNPS)

Synopsys is a leading technology firm specializing in silicon design and verification and its P/E ratio was 46.84. The electronic design automation firm holds a market cap of US$ 47.31 billion.

The price of the SNPS stock decreased by about 15 per cent YTD while adding over three per cent YoY and around the same per cent in the third quarter through September 29. Its price was down about 19 per cent from its 52-week high of US$ 391.17 noted on August 15, this year.

The company said on September 1, that its board of directors had approved its stock repurchase program with an increased authorization to buy up to US$ 1.5 billion worth of common stock.

Synopsys's revenue was US$ 1.24 billion in Q3 FY22, compared to US$ 1.05 billion in Q3 FY21. On a GAAP basis, the California-based firm's diluted EPS was US$ 1.43 apiece in Q3 FY22, compared to US$ 1.27 per share in Q3 FY21.

For the final quarter of fiscal 2022, the company expects its revenue to be between US$ 1.26 billion and US$ 1.29 billion.

Tower Semiconductor Ltd (TSEM) Q2 FY22 earnings highlightsSource: ©Kalkine Media®; © Canva Creative Studio via Canva.com

Tower Semiconductor Ltd. (NASDAQ: TSEM)

Tower Semiconductor is a chip manufacturing firm with a P/E ratio of 23.94. The US$ 4.83 billion market cap company focuses on manufacturing integrated circuits through its specialty processing technologies. 

The stock price of TSEM increased by over 12 per cent YTD while adding about 43 per cent in the last 12 months through September 28. However, the stock price of the chipmaker declined three per cent QTD.

The US$ 4.83 billion market cap firm's revenue jumped 18 per cent YoY to US$ 426 million in Q2 FY22. Tower Semiconductor's Q2 FY22 net profit was US$ 58 million, signifying an increase of 88 per cent YoY. 

Citrix Systems, Inc. (NASDAQ: CTXS)

Citrix Systems is a cloud computing technology company with a dividend yield of 0.36 per cent. The US$ 13.18 billion market cap virtualization technology firm offers servers, apps, SaaS, and other related services to its clients.

The stock price of CTXS jumped over nine per cent YTD while decreasing nearly three per cent YoY. On a QTD, the technology firm's price rose around six per cent.

Citrix Systems' revenue was US$ 859.52 million in Q2 FY22, compared to US$ 812.11 million in the year-ago quarter. The cloud computing company's net income totaled US$ 115.45 million in Q2 FY22, versus US$ 62.76 million in Q2 FY21. 

Bottom line:

Both S&P 500 and Nasdaq Composite index confirmed their place in the bear market through September 28, falling about 22 per cent and 29 per cent, respectively, from their January highs.

The S&P 500 index, which depicts the overall picture of the stock market, slipped more than 14 per cent in the last 12 months while slipping about 22 per cent in the running year. On a QTD basis through September 28, the S&P 500 index fell about two per cent.

On the other hand, the tech-savvy Nasdaq Composite Index, which primarily tracks the performances of the growth stocks, fell over 29 per cent this year, while trading flat in the running quarter. 

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