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Opportunities in US Tech Stocks Ahead of the G20 Summit

Nov 29, 2018

 

  • Today, tech stocks are in focus as we look at constituents of the S&P 500 Information Technology Sector to identify ‘cheap’ buying opportunities for quality large-cap US tech stocks.  
     
    • Although S&P 500 tech stocks are up 5.96% on a YTD basis, their aggregate trailing P/E is down 4.63% YTD to 24.73x as of yesterday’s close, signaling decelerating growth expectations for the US tech industry.  
       
  • Among S&P 500 tech stocks, some attractive buying opportunities stand out.  
     
    • Apple (AAPL), the largest tech stock in the S&P 500, looks extremely attractive with a trailing P/E of just 15.19x as of yesterday’s close. In our AI Quant Models, Apple is rated “Attractive” in our US Information Technology Global Top Stock Ideas and “Attractive” in our US Large-Cap Global Top Stock Ideas.  
       
    • Micron Technologies (MU) stands out as another potentially strong buying opportunity within the S&P 500’s tech sector with an extremely cheap trailing P/E of just 3.46x as of yesterday’s close. Micron is down 11.36% on a YTD basis primarily due to increased tensions in the US-Sino trade war driving lower global memory chip demand. A resolution to the trade war, or even a cooling of tensions, is a possibility during this weekend’s G20 Summit and would prove bullish for Micron. In our AI Quant Models, Micron is rated “Top Buy” in our US Information Technology Global Top Stock Ideas and “Attractive” in our US Large-Cap Global Top Stock Ideas.

S&P 500 Information Technology Sector Heat Map, Size by Market Capitalization vs. Color by P/E

Source: Capital IQ

YTD S&P 500 Information Technology Sector Share Price vs. Price/Diluted EPS

Source: Capital IQ