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3 Stocks Up on Nasdaq's Recovery From Coronavirus-Led Plunge

Major U.S. market indexes have taken the road to revival from the pandemic that dragged stocks to their bottoms in late-March. The Nasdaq Composite, in particular, is quite close to its all-time high in more than three months. This growth was largely due to the economy reopening, and subsequently business and consumer activities picking up.

Nasdaq Composite Only 2.1% From a Record High

Although the tech-heavy index lost 0.7% lower on Jun 4 to wrap up the trading session at 9,615.81, the index is only 2.1% away from hitting its all-time closing high of Feb 19. After all, the indexes were subdued in March by the pandemic, when the majority of market components hit their lowest points.

But the Nasdaq Composite’s rise since its March lows has been remarkable. The index has gained more than 30% since Apr 1 and 8.2% since Apr 30, when stay-at-home orders were relaxed in almost all of the 50 states.

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As of May-end, all 50 states gradually started to reopen their economies. Each state followed a timeline of its own to get their respective economies going again. The lockdown had closed centers of economic activities since March, given the spike in infections during the time.

Businesses, offices, shops, stores and movie theatres, however, are now open again and attracting their old customers. As consumer activity is picking up,businesses such as airlines, hotels, restaurants, retailers of apparel, shoes and other discretionary products are also gaining momentum. In addition, with the recovery in business activity, technology stocks are witnessing growth demand, as operations outside home are also gather steam.

This is why it could be ideal to take a look at a couple of technology stocks from the index that have pushed their business operations ahead through the pandemic and have gained notably over the past one month.

3 Tech Stocks to Grab Today

We have, therefore, rounded up three Nasdaq-listed stocks below. These stocks are well-positioned to gain ahead on the back of their business activities. Finally, all of these stocks carry a Zacks Rank #2 (Buy).

Shares of Micron Technology, Inc. (MU), which belongs to the Zacks Semiconductor Memory industry, have gained 12.8% over the past month compared to the industry’s gain of 7.8% during the same period.

A major reason behind this increase is strong demand for memory chips from personal computer manufacturers and datacenter operators. The spike in demand for home office equipment came as the majority of employees worked from home and students relied on desktops and laptops to study from home amid the global virus-triggered lockdown.

Looking ahead, Micron is set to gain from the revival in demand for DRAM, supported by progress in customer inventory adjustments in the cloud, graphics and the personal computer markets. The company also offers NAND products; NAND flash chips are used extensively in smartphones and solid-state hard drives. The demand for DRAM and NAND memory chips has pushed Micron’s top  and bottom lines.

Finally, Micron is focussing on improving its cost structure and raising the mix of high-value solutions in its portfolio, which could push margins. The company’s last reported earnings, for the quarter ended February 2020, were promising. The company’s quarterly earnings of 45 cents per share easily beat the Zacks Consensus Estimate of 38 cents. In addition, revenues of $4.80 billion also surpassed the Zacks Consensus Estimate by 3.04%.

Micron Technology’s expected earnings growth rate for next year is 61.3%. The Zacks Consensus Estimate for the company’s current-year earnings has moved 12.8% north in the past 30 days.

NVIDIA Corporation (NVDA) has gained a prominent market share because of its gaming services. The company’s advanced graphics cards has become very popular recently, thanks to the strong rise in esports players, PC gamers and more spending on the gaming graphics processing units. In addition, the company’s Turing GPU and its real-time ray tracing technology are also being adopted widely.

The company’s strong presence in datacenters market was a boon for the tech giant during the lockdown, as more businesses shifted to cloud and are still doing so. This has led to a spike in demand for GPUs, which could fare well for NVIDIA ahead.

The company’s first-quarter fiscal 2021 earnings report gives a glimpse into what drove NVIDIA during the pandemic. Graphics and Compute & Networking segments were responsible for generating 61.9% and 38.1% of adjusted revenues, respectively. The company reported non-GAAP earnings of $1.80 per share that beat the Zacks Consensus Estimate by 6.5% and adjusted revenues of $3.08 billion beat the consensus mark by 2.8%.

NVIDIA’s expected earnings growth rate for next year is 21.8%. The Zacks Consensus Estimate for the company’s current-year earnings has moved 4.9% north in the past 30 days. Shares of the company, which belongs to the Zacks Semiconductor - General industry, have gained 19.4% over the past month compared to the industry’s gain of 11.9% during the same period.

Shares of Okta, Inc. (OKTA), which belongs to the Zacks Internet - Software and Services industry, have gained 17.4% over the past month compared to the industry’s gain of 15.8% during the same period.

Much of this rise in Okta’s price performance is the result of the strong and sudden demand for identity management services around the globe, as employees took to working from home. Okta, which develops cloud-based identity management systems, therefore was a natural go-to for investors who were seeking to investment in the software-as-a-service space.

Demand for the company’s services was evident in its latest earnings report, which was revealed in the last week of May. Okta’s first-quarter fiscal 2021 revenues surged 46% from the year-ago quarter to $182.9 million and beat the Zacks consensus mark by 6.3%. This growth was driven by higher subscription revenues, which surged 48.3% on a year-over-year basis to reach $173.8 million.

Okta’s expected earnings growth rate for next quarter is 14.3%. The Zacks Consensus Estimate for the company’s current-year earnings has moved 45.7% north in the past 30 days.

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