Nasdaq's Rally Continues Unabated: 5 Hot Picks

The Nasdaq composite hit a record intra-day high of 9,842.49 on Jun 5 and closed at 9.814.08, slightly below the all-time high of 9,838.37 achieved on Feb 19. The Nasdaq 100 climbed 2% to 9,824, surpassing the previous record close of 9,718.73, again on Feb 19.

Notably, since March, Nasdaq has surged 43% on momentum in technology (particularly cloud computing), e-commerce and streaming stocks like Apple AAPL, Microsoft, Amazon, and Netflix.

Markedly, Apple hit a 52-week high on Jun 5, reflecting optimism surrounding the smartphone market’s resilience against the coronavirus onslaught despite IDC’s apprehensions of a 12% slump in 2020. Further, Microsoft, Google and Amazon’s cloud arm – Amazon Web Services (“AWS”) – benefit from solid demand for cloud computing services.

Moreover, the surprisingly upbeat jobs report released on Jun 5, which reported a 2.5-million increase in payrolls in May against economists’ expectations of a loss of as many as 9 million jobs, as cited by MarketWatch, provided a shot in the arm to the index.

The favorable jobs report reflects benefits of an unprecedented government stimulus and the reopening of U.S. and global economies post coronavirus-induced lockdowns and shelter-in-place guidelines.

Notably, New York City, one of the hardest-hit by coronavirus, is set to get into the first phase of reopening on Jun 8, which includes the restart of construction and limited retail operations.

Prospects Galore for Nasdaq Stocks

Although the economic recovery is expected to take some time, the momentum in Nasdaq-listed stocks will continue, primarily fueled by changing consumer preference and behavior. We expect the work-from-home and online learning wave to keep demand for remote-working tech, cloud services and cybersecurity solutions high.

Further, adoption of ecommerce services is expected to remain robust as people try to avoid gatherings amid the need to maintain physical distancing. Additionally, demand for coronavirus testing solutions is expected to remain high until the availability of an effective vaccine.

Here we pick five Nasdaq-listed stocks that, apart from boasting strong fundamentals, carry a favorable combination of a VGM Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Per the Zacks proprietary methodology, stocks with such this perfect mix of elements offer solid investment opportunities.

These stocks have returned more than 30% on a year-to-date basis.

Year-to-Date Performance

Top Bets

Quidel QDEL received emergency use authorization (EUA) for its Lyra Direct SARS-CoV-2 Assay and Sofia 2 SARS Antigen FIA test from the FDA in May. The EUA now allows Lyra Direct SARS-CoV-2 Assay to process samples without requiring an up-front sample extraction, thereby saving roughly 50 minutes of processing time. Moreover, Sofia 2 SARS Antigen FIA test can now be used to detect coronavirus at the point of care.

Quidel currently flaunts a Zacks Rank of 1 and a VGM Score of B. The consensus mark for its fiscal 2020 earnings is pegged at $6.75 per share, having moved 88% north in the past 30 days. Earnings are expected to surge 127.3% from the prior-year reported number.

JD.com JD is riding on its JD Retail segment, which is the key-growth driver on a robust omni-channel strategy. This Zacks Rank #1 company’s strengthening momentum across third-party logistics, Flash Delivery initiative and expanding 24-hour delivery service are other encouraging factors. Also, the integration of AI into JD’s warehouse network is expected to continue accelerating the delivery of its direct sales orders. 

JD has a VGM Score of B. The Zacks Consensus Estimate for its 2020 earnings is pegged at $1.24 per share, having been revised 49.4% upward in the past 30 days. Earnings are expected to increase 19.2% from the figure reported in the previous year.

eBay EBAY thrives on the growing adoption of e-commerce owing to coronavirus-led social-distancing protocols, quarantine and lockdowns, globally. This Zacks Rank #2 company has a VGM Score of A.

Notably, eBay recently raised its second-quarter 2020 guidance. Growth initiatives, which aim at enhancing seller experience by offering innovative seller tools and delivering improved buyer experience by utilizing structured data, will help eBay gain in the current scenario.

The consensus mark for eBay’s 2020 earnings has risen 1% to $3.13 over the past 30 days, suggesting growth of 10.6% from the year-ago reported figure.

Fortinet FTNT is benefiting from its dominance in the Unified Threat Management (UTM) space, which is one of the fastest-evolving segments in the network security space. The rising cyber-attack risks are propelling demand for Fortinet’s products and services. This Zacks Rank #2 company has a VGM Score of B.

The Zacks Consensus Estimate for Fortinet’s 2020 earnings stands at $2.78 per share, having moved 1.1% north over the past 30 days. Earnings are expected to grow 12.6% from the figure reported in the preceding year.

CrowdStrike Holdings CRWD is advancing on the back of rapid uptake of its Falcon solution. This Zacks #2 Ranked company’s expanding user base is a key catalyst. CrowdStrike added 830 net new subscription customers in first-quarter fiscal 2020. The company had a total of 6,261 subscription customers as of Apr 30, 2020.

CrowdStrike has a VGM Score Score of B. The consensus mark for fiscal 2021 loss is pegged at 7 cents per share, which has improved by 5 cents in the past 30 days. The company had reported a loss of 42 cents in the previous fiscal year.


5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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Apple Inc. (AAPL) : Free Stock Analysis Report
 
eBay Inc. (EBAY) : Free Stock Analysis Report
 
Quidel Corporation (QDEL) : Free Stock Analysis Report
 
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
 
JD.com, Inc. (JD) : Free Stock Analysis Report
 
CrowdStrike Holdings Inc. (CRWD) : Free Stock Analysis Report
 
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