These are the cheapest tech stocks today following the severe drawdown in the sector
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CNBC Pro began searching for names that were the most affordable in the sector following the devastation in tech stocks in 2015. As rising inflation affects technology companies and Wall Street considers the price of tech stocks, investors are abandoning names in this sector. Tech companies dominate the Nasdaq Composite, and it is trading in bear markets territory at 27%. CNBC Pro reviewed FactSet data and found that some names in the list are beginning to appear like bargains compared to historic valuations. Our screen revealed that tech stocks are being traded at steep discounts compared with their historic price-to-earnings ratio. CNBC compared the forward P/Es of these companies to determine which stocks are trading at the highest discount relative to historical values. CNBC calculates the forward P/E of a company based upon earnings projections for the next 12 month. The following list contains the best tech stocks. After their drawdown, a number of cheap chip stocks appear to be bargains. The PHLX Semiconductor sector index (SOX) has dropped nearly 28% in the last year. Analysts from Bank of America suggested this week that there could be several catalysts to help the market recover. They suggested that a decrease in China’s lockdowns or indications of healthy consumer demand could help boost the names of semiconductor companies. Advanced Micro Devices currently trades for a close 50% discount to its average forward price/e over the past five years. Nvidia and Micron Technology are among the other semiconductor companies that trade at steep discounts relative their average forward earnings multiples. Facebook parent Meta is another name on our list. It is currently down by more than 46% and trades at 39% below its historic valuation. Guggenheim Securities analysts called this stock a “buy” last week, as they expect the company to see improvements in ad trends during the second half. Long-term potential of the company’s metaverse initiatives was also appealing to the analysts. After shares fell 27% last year, Alphabet-Google is looking good. Current shares are traded at 31% below their historic P/E ratio. JMP Securities analyst said Wednesday that AI is “improving nearly every sector of Alphabet’s businesses” following Google’s Marketing Live this week. JMP Securities reiterated its market outperform rating for the company and set a price target of $3,300 on the company. They stated that automation in ad creation would lead to greater returns for Google. PTC & Skyworks / Qorvo & Western Digital also make up this list.
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