A significant uptick of 50.7% in the NASDAQ Composite over the past year underscores remarkable growth and positive sentiment in the technology sector, reflecting improved investor confidence and optimism regarding the future of tech companies.
Given this context, investors could consider exploring fundamentally strong tech stocks Wolters Kluwer N.V. (WTKWY), Canon Inc. (CAJPY), AUO Corporation (AUOTY), and Box, Inc. (BOX) for potential returns.
The technology market booms with enhanced enterprise adoption, driving substantial growth across diverse industries and applications. This year, the global tech market is projected to be valued at $9.04 trillion billion. The market is further expected to expand at a CAGR of 8.3% to reach $12.42 trillion by 2028.
Besides, the Biden-Harris administration designated 31 Tech Hubs across 32 states and Puerto Rico, focusing on industries like autonomous systems, quantum computing, and semiconductor manufacturing. Nearly $500 million is available for implementation funding in the second phase, empowering regional innovation and job creation.
Recently, SAFECOM and NCSWIC jointly launched the 911 Cybersecurity Resource Hub, providing a centralized platform for ECCs to access cybersecurity resources and training opportunities. The hub is developed in collaboration with federal agencies and industry partners and aims to bolster cybersecurity preparedness for emergency communications stakeholders nationwide.
Moreover, the U.S. consumer electronics industry is poised for growth in 2024, with retail sales expected to rise 2.8% year-over-year to $512 billion. Market experts attribute this growth to the refresh cycle of gadgets purchased during the pandemic, augmented and virtual reality AR&VR devices, and a surge in consumer software and services revenue.
The IT hardware market has further surged significantly in recent times due to rising laptop and tablet adoption, fueled by public sector digitalization and pandemic-induced remote work needs. The IT hardware market is estimated to reach $130.86 billion in 2024 and is expected to grow at a CAGR of 7.9% to reach $191.03 billion by 2029.
Considering these favorable market trends, let’s discuss the fundamentals of four top tech stock picks: WTKWY, CAJPY, AUOTY, and BOX.
Wolters Kluwer N.V. (WTKWY)
Based in the Netherlands, WTKWY is a global provider of professional information, software, and services across various industries, including healthcare, finance, legal, and corporate compliance. Its solutions empower professionals to make informed decisions, drive productivity, manage risks, and enhance performance in their respective fields.
On March 14, 2024, WTKWY repurchased 157,167 of its ordinary shares from March 7 to March 13, 2024, totaling €22.80 million ($24.82 million) at an average price of €144.76 ($157.56) per share. These repurchases are part of a share buyback program announced on February 21, 2024, aiming to repurchase shares for up to €1 billion ($1.09 billion) in the current year.
On March 13, WTKWY launched its CCH Tagetik Global Minimum Tax Expert solution in North America. This solution aids multinational companies in complying with OECD Pillar Two tax requirements. It streamlines data collection, alignment, and reporting, supporting CFOs and tax leaders in navigating complex global tax regulations.
WTKWY’s revenues and gross profit grew 2.4% and 3.4% year-over-year to €5.58 billion ($6.08 billion) and €4.01 billion ($4.36 billion), respectively, in the fiscal year that ended December 31, 2023. It posted an operating profit of €1.32 billion ($1.43 billion) for the year. Moreover, the company's EPS rose 2% from the previous year to €4.09.
The company anticipates a fiscal year 2024 adjusted operating profit margin of 26.4% to 26.8%, along with an adjusted free cash flow ranging from €1.15 billion ($1.25 billion) to €1.20 billion ($1.31 billion).
Analysts expect WTKWY’s revenue to increase 7% year-over-year to $6.47 billion, and its EPS is anticipated to grow 6.1% year-over-year to $5.22 for the fiscal year ending December 2024. Moreover, the company surpassed consensus EPS estimates in three of the trailing four quarters, which is notable.
WTKWY’s shares have surged 24.6% over the past six months and 30.9% over the past year to close the last trading session at $157.35.
WTKWY’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted optimally.
The stock has an A grade for Stability and a B for Quality. In the Technology - Services industry, WTKWY is ranked #19 among 81 stocks.
To access additional ratings for WTKWY for Growth, Value, Momentum, and Sentiment, click here.
Canon Inc. (CAJPY)
Headquartered in Tokyo, Japan, CAJPY is a global manufacturer and seller of office multifunction devices, printers, cameras, medical equipment, and lithography equipment. It operates through Printing Business Unit; Imaging Business Unit; Medical Business Unit; Industrial Business Unit; and Others segments.
On March 5, 2024, CAJPY converted all power used in the fiscal year 2023 to renewable energy at five manufacturing sites, including facilities in Vietnam, Thailand, and China, producing printing products like office multifunctional devices and inkjet printers.
This initiative marks a significant step toward CAJPY’s goal of utilizing renewable energy and achieving net-zero CO2 emissions across its operations.
On January 30, CAJPY resolved to acquire up to 33 million shares of its common stock, equivalent to 3.3% of issued shares, with a total cost of acquisition not exceeding ¥100 billion ($670.47 million), aiming to enhance shareholder returns and improve capital efficiency.
The acquisition period spans from February 1, 2024, to January 31, 2025, as part of the company's strategy for active growth investment and shareholder value enhancement.
During the fourth quarter, which ended December 31, 2023, CAJPY's net sales increased marginally from the previous year’s quarter to ¥1.16 trillion ($7.80 billion). The company's gross profit and operating profit grew 5.7% and 19.2% from a year-ago quarter to ¥548.08 billion ($3.67 billion) and ¥115.99 billion ($777.70 million), respectively.
As of December 31, 2023, the company’s net cash provided by operating activities amounted to ¥451.19 billion ($3.03 billion), compared to ¥262.60 billion ($1.76 billion) as of December 31, 2022.
For the fiscal year ending December 31, 2024, CAJPY projects net sales of ¥4.35 trillion ($29,17 billion), an operating profit of ¥435 billion ($2.92 billion), and net income attributable to CAJPY of ¥305 billion ($2.04 billion).
Street anticipates CAJPY's revenue to surge by 159.1% year-over-year to $29.28 billion for the fiscal year 2024. The stock has gained 21% over the past six months and 37.7% over the past year to close the last trading session at $29.65.
CAJPY’s POWR Ratings reflect its optimistic prospects. The stock has an overall A rating, translating to a Strong Buy in our proprietary rating system.
The stock has an A grade for Momentum and a B for Value, Stability, and Quality. CAJPY is ranked #6 among 37 stocks within the B-rated Technology - Hardware industry.
Click here to see CAJPY’s ratings for Growth and Sentiment.
AUO Corporation (AUOTY)
Based in Hsinchu City, Taiwan, AUOTY manufactures and sells TFT-LCDs and flat panel displays for diverse applications worldwide. Additionally, it offers solar energy products, including ingots, solar wafers, modules, and related services, operating across multiple segments globally.
On March 8, 2024, AUOTY reported unaudited consolidated revenue of NT$19.83 billion ($626.26 million) for February 2024, marking a 7.5% month-over-month increase and a 23.5% year-over-year growth. Also, total panel area shipment for February reached nearly 1.73 million square meters, a 10.1% month-on-month rise and a 23.1% year-over-year increase.
In the fourth quarter, which ended December 31, 2023, AUOTY’s total revenue amounted to NT$63.35 billion ($2 billion). Its gross profit stood at NT$2.13 billion ($67.37 million), with a gross margin of 3.4%. Additionally, the company reported an EBITDA of NT$3.85 billion ($121.48 million), along with an EBITDA margin of 5.4%.
Analysts anticipate AUOTY's revenue to rise by 10% year-over-year to $8.71 billion for the fiscal year ending December 2024. Moreover, the company surpassed consensus EPS estimates in three of the trailing four quarters.
AUOTY’s stock has gained 9.7% over the past three months to close the last trading session at $5.70.
AUOTY’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has an A grade for Momentum and a B for Stability. Within the Technology - Electronics industry, AUOTY is ranked #8 of 41 stocks.
In addition to the POWR Ratings stated above, access AUOTY’s Growth, Value, Sentiment, and Quality ratings here.
Box, Inc. (BOX)
BOX offers a cloud content management platform facilitating seamless content sharing and collaboration across devices. Serving diverse industries worldwide, the company enhances productivity and streamlines business processes for over 100,000 paying organizations.
On March 5, 2024, BOX expanded its collaboration with Microsoft Corporation (MSFT) through a new integration with Azure OpenAI Service, providing advanced AI capabilities to its cloud content management platform while ensuring robust security and compliance.
This integration enables organizations to leverage AI for diverse applications, enhancing productivity and decision-making across industries.
BOX’s revenues increased 2.5% year-over-year to $262.88 million in the fourth quarter that ended January 31, 2024. Its non-GAAP operating income and net income attributable to common stockholders rose 5.3% and 8.7% from the prior year’s period to $70.07 million and $61.18 million, respectively.
Furthermore, the company's non-GAAP net income per share attributable to common stockholders grew 13.5% from the prior-year quarter to $0.42.
For the fiscal year 2025, BOX anticipates revenue between $1.08 billion to $1.09 billion. Additionally, the company’s non-GAAP diluted net income per share is projected to range between $1.53 to $1.57.
Analysts expect BOX’s revenue to increase 4.4% year-over-year to $1.08 billion for the fiscal year ending January 2025. The consensus EPS estimate of $1.58 for the current year indicates an 8.3% year-over-year improvement. Moreover, the company surpassed consensus revenue and EPS estimates in three of the trailing four quarters.
BOX’s shares have climbed 16.9% over the past six months and 12.3% over the past three months to close the last trading session at $29.13.
BOX’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has an A grade for Quality and a B for Growth and Value. In the Technology - Services industry, BOX is ranked #7.
For more insights into BOX's Momentum, Stability, and Sentiment ratings, click here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
WTKWY shares were trading at $157.41 per share on Tuesday morning, up $0.06 (+0.04%). Year-to-date, WTKWY has gained 10.46%, versus a 7.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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