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These 3 Tech Stocks Are Already up 15% In 2023

After a rough showing last year, technology stocks have busted out of the gate strong in 2023, undoubtedly a welcomed development among investors.

A hawkish Fed, geopolitical uncertainties, and inflation all contributed to the sector’s poor performance, with investors facing volatility throughout the year.

However, with sentiment shifting following better-than-expected economic data, buyers have finally returned after a long hibernation.

Three technology stocks – Jabil Inc. JBL, Salesforce CRM, and NetEase NTES – have stopped for nobody so far in 2023, all up more than 15% year-to-date.

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Zacks Investment Research


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In addition, all three have seen their earnings outlooks drift higher as of late, providing the fuel shares need to continue their runs. Let’s take a closer look at each one.

Jabil Inc.

Jabil provides electronic manufacturing services and solutions to its customers, currently boasting a Zacks Rank #2 (Buy).

The company’s latest quarterly release on December 15th has helped lift shares; JBL exceeded the Zacks Consensus EPS Estimate by nearly 5% and reported revenue 4% above expectations thanks to the strong execution of its operational plans.

In fact, it was the company’s fifth consecutive quarter of exceeding both earnings and revenue estimates.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Further, JBL shares provide exposure to technology paired with an income stream; JBL pays a modest dividend, currently yielding 0.4% with a sustainable payout ratio sitting at 5% of its earnings.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Salesforce

Salesforce is the leading provider of on-demand Customer Relationship Management (CRM) software, enabling organizations to better manage critical operations.

Activists have been circling CRM recently, pushing for the company to improve its margins which has provided a big boost for shares.

Analysts have upped their outlook across all timeframes as of late, landing Salesforce into a Zacks Rank #2 (Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Following the challenging price action in 2022, CRM’s valuation multiples have taken a step back; the company’s forward price-to-sales ratio sits at 4.9X, well beneath the 7.8X five-year median and steep highs of 9.5X in 2022.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

NetEase

NetEase is a Chinese internet technology company engaged in the development of applications, services, and other technologies. Presently, NTES is a Zacks Rank #2 (Buy).

Similar to JBL, NetEase rewards its shareholders via its annual dividend that currently yields 1.9%, nicely above the Zacks Computer and Technology sector average.

Notably, NetEase’s payout has grown by more than 30% over the last five years.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

NetEase reported strong results in its latest quarter, exceeding the Zacks Consensus EPS Estimate by a sizable 42% and reporting revenue modestly ahead of expectations.

Impressively, the average EPS beat across its last four releases is 34%. As we can see in the chart below, investors certainly cheered on the latest quarterly release.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

With sentiment slowly shifting following some better-than-expected economic data, buyers are finally revisiting technology stocks.

Of course, nobody has a magic crystal ball that tells us where the sector heads next, but we’re certainly off to a far better start compared to 2022.

All three stocks above from the Zacks Computer and Technology Sector – Jabil Inc. JBL, Salesforce CRM, and NetEase NTES – have been no exception to the sector’s great start, all up more than 15% year-to-date.

In addition, all three have seen their earnings outlooks drift higher as of late, providing the cherry on top.

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Salesforce Inc. (CRM) : Free Stock Analysis Report

Jabil, Inc. (JBL) : Free Stock Analysis Report

NetEase, Inc. (NTES) : Free Stock Analysis Report

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Zacks Investment Research