Blue-Chip Tech Stocks for Investors to Buy Amid Q3 2019 Earnings Season

The S&P 500 is up over 1% in the last month and 12% in the last 12 months, despite ongoing global economic slowdown worries. Wall Street reacted somewhat positively to the recent “phase one” trade deal reached between the U.S. and China.

Uncertainty remains, but third quarter earnings season has taken center stage, with results from giants such as Amazon AMZN, Intel INTC, and Twitter TWTR out Thursday alone.

All three of these tech companies are widely different and posted similarly varying quarterly financials, with Amazon down big after its profits slipped. Meanwhile, INTC shares surged on an earnings beat and Twitter plummeted on disappointment from its advertising business. This helps demonstrate how quarterly earnings results are often catalysts, in either direction.

Therefore, we searched using our Zacks Stock Screener for large-cap, blue-chip tech stocks that look both stable and poised to expand even in a difficult environment…

Alphabet Inc. GOOGL

Google parent Alphabet is the only one of the three companies on our list today that hasn’t already reported its quarterly earnings results. But investors won’t have to wait long, with the firm scheduled to release its Q3 financial results after the closing bell on Monday, October 28. Buying stocks directly before earnings is inherently risky, as no one ever knows what will happen or how Wall Street will react. For example, GOOGL stock surged roughly 9% after it posted its Q2 results, but slipped around 6% following its Q2 release, despite topping our quarterly earnings estimates both times.

With this in mind, shares of Google are down slightly over the last six months and sit about 2.5% off their 52-week highs through mid-morning trading Friday, which means its upcoming results seem likely to move the stock. Our current Zacks Consensus Estimates call for Alphabet’s Q3 revenue to jump 20.9%, which would top Q2’s 19% and Q1’s 17%. The firm’s adjusted Q3 EPS figure is projected to slip 3.8%, but Alphabet’s full-year earnings are projected to climb over 13% over the next two years, on the back of 20.4% and roughly 18%, respective revenue growth in 2019 and 2020.

Google is currently a Zacks Rank #2 (Buy), sports a “B” grade for Growth in our Style Scores system, and has topped our quarterly earnings estimates by an average of 19% in the trailing four periods. GOOGL is also trading below its industry’s average forward P/E of 27.3X at 22.8X, which marks a discount to its own two-year median of 24.1X. Interested investors should pay close attention to any updates on Google’s soon-to-be-launched cloud gaming service Stadia, self-driving car unit Waymo, its Pixel-driven hardware unit, and other non-ad businesses.

Microsoft MSFT

Microsoft has been on an impressive run over the last three years up 132%, easily surpassing Apple’s AAPL 112% climb. The company also just posted strong quarterly (Q1 fiscal 2020) results on Wednesday, topping our quarterly earnings estimate by over 10% for the third period in a row, while sales beat and surged 14%. Once again, MSFT’s growing cloud computing business drove growth and impressed investors. Intelligent Cloud revenue soared 27% to blow away our Key Company Metric estimate, top Q1 2019’s nearly 24% unit expansion, and crush last quarter’s 19% Intelligent Cloud growth.

Meanwhile, its Office-heavy Productivity and Business Processes unit climbed 13%, while its More Personal Computing leg popped 4%. Looking ahead, the Redmond, Washington-based firm’s full-year fiscal 2020 revenue is projected to pop 11.2% to hit $139.92 billion, with fiscal 2021 expected to jump 11% higher to reach $155.26 billion. At the bottom end of the income statement, MSFT’s adjusted full-year earnings are projected to climb 11.2% and 13.3%, respectively.

MSFT’s earnings outlook has also turned much more positive since the firm posted its Q1 results, which helps it earn a Zacks Rank #2 (Buy) at the moment. The company with a $1 trillion market cap also holds an “A” grade for Momentum and a “B” for Growth to help it earn an overall “B” VGM score. Plus, the firm announced prior to the release of its quarterly earnings results that it raised its quarterly cash dividend by 11% and approved a new stock buyback program.

Adobe Systems ADBE

Adobe topped our Q3 fiscal 2019 earnings and revenue estimates all the way back on September 17, with revenue up 24% and adjusted earnings up over 18%. Before we dive deeper, it is worth remembering that Adobe invented the Portable Document Format, better known as the PDF, in the early 1990s. Today, the company sells a variety of offerings, from its suite of creative software such as Photoshop to cloud-based subscription solutions for businesses.

One of the company’s newer units, Adobe Spark, aims to capitalize on the rapid rise of digital media, by helping users create web pages, graphics, and short videos very quickly. Moving on, ADBE’s Q4 sales are projected to jump 20.5% to reach $2.97 billion and help lift its adjusted earnings by 23.5%. The tech firm’s full-year fiscal 2019 ESP figure is expected to pop 16% on 23.5% revenue expansion. This would match last year’s sales growth and mark the continuation of between 22% and 25% sales expansion over the last three years.

Peeking further ahead, Adobe’s fiscal 2020 earnings are projected to jump 24% higher on 17% stronger revenue. Adobe, like its two peers on this list, is a Zacks Rank #2 (Buy) right now that rocks a “B” grade for Growth. Lastly, ABDE shares have blown away its peer group (which includes Salesforce CRM and Oracle ORCL over the last two years, up 56% against 44%. The stock is down 4% in the last six months and Adobe shares sit 13% below their 52-weeks highs, which could give ADBE room to run.

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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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
Twitter, Inc. (TWTR) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Oracle Corporation (ORCL) : Free Stock Analysis Report
 
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
 
salesforce.com, inc. (CRM) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
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