Technology stocks have dominated 2020 and are well-poised to outperform in 2021 also. The demand for tech-based companies and solutions is growing and companies are increasing their tech budgets for digital transformation in anticipation of continued an growing remote working for greater productivity even after the pandemic has departed.
There are certain technology stocks that did not perform as expected, However, they are innovating quickly to ensure that they stand out in 2021. These companies are working on providing new solutions to real-world problems. Their solutions, based on emerging technology, such as AI, are likely to change the way businesses and consumers operate.
Companies like Cisco Systems, Inc. (CSCO), Ambarella, Inc. (AMBA), Veritone, Inc. (VERI) are working on cutting-edge technologies and 2021 is likely to be a turnaround year for them. These companies already have a history of solid performance that they will seek to continue into 2021.
Cisco Systems, Inc. (CSCO)
CSCO designs, develops, manufactures, and markets networking products and services. The company sells to the information technology and communications industries and has worldwide operations. CSCO’s stock has gained 33.6% since hitting a low in mid-March.
The company has released a slate of updates and new features on its Webex platform that allow users to communicate, collaborate, and work. Some of the new features include noise cancellation, speech enhancement, and transcriptions. The company is also in talks to acquire IMImobile, a cloud communications and cloud services company. This move could help CSCO become a market leader in the cloud communications space.
For the quarter ended October 2020, the company saw a 2% year-over-year increase in service revenue. The company also increased its cash flow by 14% compared to the same period last year.
CSCO is expected to see a revenue growth of 3% for the quarter ended April 2021 and 3.8% in 2022. The company’s EPS is estimated to grow 6.3% in 2022 and at a rate of 6.1% per annum over the next five years.
How does CSCO stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #19 of 53 stocks in the Technology – Communications/Networking industry.
Ambarella, Inc. (AMBA)
AMBA develops and markets low-power video compression and image processing solutions. The company’s products are used in wearable cameras, flying cameras, sports cameras, along with other applications. AMBA’s stock has risen 47.8% year-to-date.
The company has recently released the CV28M camera system on chip (SoC), which is the latest offering in its line of CVflow image processing solutions. The CV28M uses artificial intelligence to enable better image processing for applications in smart home security, consumer robotics, and retail monitoring.
For the quarter ended October 2020, the company reported a 5.6% year-over-year increase in cash and cash equivalents. The company is focusing on using artificial intelligence to power its products for application in security, safety, and automation.
AMBA’s revenue is estimated to increase 1.6% for the quarter ended January 2021 and 18.2% in 2022. The company’s EPS is expected to rise 103.7% in 2022 and 15% per year over the next five years.
AMBA’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. It is ranked #33 out of 86 stocks in the Semiconductor & Wireless Chip industry.
Veritone, Inc. (VERI)
VERI develops artificial intelligence-based solutions for use in data analysis. The company’s solutions help users to analyze unstructured audio and video to gain insight from large amounts of information. VERI’s stock price has increased 127.8% over the past six months.
The company recently announced significant enhancements to its Veritone Discovery and Veritone Attribute offerings. These updates will help users gain more ad revenue and drive advertiser satisfaction. VERI’s aiWARE offering, which is the world’s first operating system for artificial intelligence, is now compatible with the NVIDIA (NVDA) CUDA platform. This will allow users of the OS to run artificial intelligence and machine learning applications on NVIDIA’s GPUs.
For the quarter ended September 2020, the company’s revenue increased 23% year-over-year. The company’s gross profit increased 30% during the same period.
VERI’s revenue is expected to grow 28.3% for the quarter ended March 2021 and 19.6% in 2021. The company’s EPS growth is expected to be 31.6% in 2021 and 50% per annum over the next five years.
It is no surprise that VERI has a “Buy” in our POWR Ratings systems with a grade of “A” in Trade Grade. In the 54-stock Technology – Services industry, VERI is ranked #24.
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CSCO shares were unchanged in after-hours trading Wednesday. Year-to-date, CSCO has declined -3.62%, versus a 15.61% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More…
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