These tech stocks could see 30% growth in 2021

Tech stocks saw their biggest gains in 2020 as the coronavirus pandemic spiked demand for technology solutions for remote work, learning and online entertainment. A massive COVID-19 vaccination should accelerate economic recovery, which will benefit the tech industry.

The COVID-19 pandemic has accelerated the adoption of digital technologies not only in business, manufacturing and ordinary consumers, but also in healthcare, education and other areas.

The Nasdaq Composite Index, which includes technology stocks, is up 43.8% in 2020 (at the close of trading on Monday). The Dow Jones and S&P 500, which include stocks of companies from various industries, showed more modest gains of 6.5% and 15.6%.

Wedbush analysts Daniel Ives and Strecker Backe predict tech stocks will gain new growth in 2021 as the global economy recovers from the COVID-19 pandemic. The start of widespread vaccination in the US and Europe gives investors reason for optimism.

Wedbush analysts acknowledge that some tech stocks have already posted huge gains and high valuations this year, but in recent weeks, many of those stocks have received downgrades or price targets from Wall Street analysts over concerns over revaluation.

However, experts say that investors are still keen to invest in growth stocks in the tech sector.

“Our recommendation is a still ‘aggressive’ technology portfolio focused on cloud, cybersecurity and FAANG (Facebook, Amazon, Apple, Netflix, Google) stocks. In our view, tech stocks could show another 30% growth over the next year, given the transformational growth stories played out in the market, ”analysts said.

Shares of Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (Alphabet GOOGL, GOOG) from early 2020 to close of trading on Monday rose 35%, 78%, 86%, 60% and 32%, respectively.

The biggest growth in 2021, according to Ives and Bake, will be shown by shares of companies such as Uber (UBER) and Lyft (LYFT), as the introduction of vaccines gives hope for the growth of the economy, the recovery of the tourism industry and the return of employees to offices.

Wedbush experts also advise investors to look at Tesla (TSLA) and AI voice recognition companies Cerence (CRNC) and Nuance (NUAN). Tesla, Cerence and Nuance are up 693%, 358% and 146% YTD. Analysts recently pointed out that Nuance has a chance of getting big healthcare deals.

Growth forecasts for cloud and consumer services companies such as Apple, Amazon, Netflix and Disney (DIS) remain particularly strong over the next six to twelve months; as well as for cybersecurity companies: Zcaler (ZS), Crowdstrike (CRWD) and Okta (OKTA); and companies that have benefited from the teleworking from home trend: Zoom Video (ZM), Docusign (DOCU) and Slack (WORK).

Analysts estimate that approximately 35% of the workloads of companies and enterprises in various industries are now in the cloud, but they expect this number to grow to 55% by 2022.

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