The technology sector’s swift advancements and continuous innovation, meeting the rising need for digital solutions, contribute to its status as one of today's most rapidly expanding industries. Taking this into account, investors could consider buying top tech stocks Dell Technologies Inc. (DELL), HP Inc. (HPQ), and TaskUs, Inc. (TASK), which are on the rise this week.
A notable surge of nearly 55.4% in the NASDAQ Composite over the past year highlights substantial growth and positive sentiment in the technology sector, signaling enhanced investor confidence and optimism surrounding the prospects of tech companies.
The 2024 technology industry outlook anticipates significant growth fueled by increased enterprise spending on software and IT services. Tech leaders are expected to focus on leveraging cloud, AI, and cybersecurity technologies to drive innovation and expansion this year.
Notably, the hype around AI sent the technology industry skyrocketing last year. International Data Corporation (IDC) projects spending on generative AI solutions to double this year. GenAI spending is further expected to reach $151.10 billion by 2027, growing at a CAGR of 86.1%.
In addition, the Consumer Technology Association (CTA) expects a 2.8% growth in retail revenues for the U.S. consumer technology industry in 2024, reaching $512 billion, indicating increased consumer spending on tech products and services.
The tech hardware market is rapidly expanding due to rising demand across sectors and the push toward digitalization in the public sector. This growth is accelerated by the increased need for devices like laptops and tablets, which is fueled by the pandemic-induced shift to remote work and learning.
The global IT hardware market size is estimated at $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 three best tech stock picks: DELL, HPQ, and TASK.
Dell Technologies Inc. (DELL)
DELL offers comprehensive solutions in infrastructure and client services worldwide through its Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) segments. Its offerings range from storage solutions and servers to desktops, workstations, and cybersecurity technologies, along with support services and financing arrangements.
On March 19, 2024, DELL expanded its collaboration with NVIDIA Corporation (NVDA) to offer the Dell AI Factory with NVIDIA. This solution facilitates seamless integration of data and AI tools for enterprises. It also aims to accelerate AI adoption by providing an end-to-end platform leveraging Dell's infrastructure and NVIDIA's advanced AI capabilities.
On March 5, DELL and CrowdStrike Holdings, Inc. (CRWD) joined forces to deliver DELL's Managed Detection and Response (MDR) services with the CrowdStrike Falcon XDR platform, bolstering cybersecurity defenses against sophisticated threats. The partnership will offer customers scalable, outcome-based security solutions to mitigate risks and enhance incident response capabilities.
On February 29, the company raised its yearly cash dividend by 20% to $1.78 per common share, and the first quarterly distribution of $0.445 per common share is payable on May 3, 2024. The company pays an annual dividend of $1.78, which yields 1.56% on the prevailing price level, higher than the four-year average of 1.01%.
DELL reported a total net revenue of $22.32 billion in the fourth quarter that ended February 2, 2024. The company's non-GAAP operating expenses decreased 12.4% year-over-year to $3.33 billion. In addition, its non-GAAP net income and EPS rose 21.8% and 22.2% from a year-ago quarter to $1.61 billion and $2.20, respectively.
For the fiscal year ending January 2025, analysts forecast a 5.8% year-over-year increase in DELL’s revenue, reaching $93.53 billion, and a 6.1% year-over-year growth in EPS to $7.57. Also, the company surpassed consensus EPS estimates in each of the trailing four quarters, which is impressive.
DELL's shares have surged 191.3% over the past year and 127.8% over the past nine months, closing the last trading session at $114.04, with an intraday gain of 2.7%.
DELL’s POWR Ratings reflect this strong 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 Momentum and Sentiment. In the B-rated Technology - Hardware industry, DELL is ranked #17 out of 37 stocks.
To access additional ratings for DELL’s Growth, Value, Stability, and Quality, click here.
HP Inc. (HPQ)
HPQ is a multinational technology firm providing personal computing devices, imaging and printing products, and related technologies and services globally. With three primary segments, including Personal Systems; Printing; and Corporate Investments, it caters to a diverse clientele spanning consumers, businesses, and various sectors globally.
On March 07, 2024, HPQ introduced new benefits for partners, including the industry's first role-based AI partner training and certification program, alongside a Growth Play opportunity tailored for AI Data Science, powered by over 100 AI-enabled solutions.
Additionally, HPQ unveiled the industry's largest portfolio of AI PCs, encompassing new HP Elite PCs and Z by HP mobile workstations, aiming to enhance productivity and creativity in hybrid work settings.
On January 30, HPQ declared a cash dividend of $0.2756 per share on the company’s common stock, payable on April 3, 2024. The company pays $1.10 annually, which translates to a yield of 3.66% on the prevailing price level, higher than its four-year average dividend yield of 3.20%.
The company’s dividend payouts have grown at CAGRs of 13.3% and 12.4% over the past three and five years, respectively. Moreover, it boasts a 13-year record of consecutive dividend growth.
In the first quarter that ended January 31, 2024, HPQ reported net revenue of $12.42 billion. The company’s non-GAAP net earnings and earnings from operations grew 10.5% and 5% year-over-year to $808 million and $1.11 billion, respectively. Its non-GAAP net earnings per share rose 11% from a year-ago quarter to $0.81.
For the fiscal year 2024, the company estimates its non-GAAP net EPS to range between $3.25 and $3.65. Additionally, it anticipates generating free cash flow from $3.10 billion to $3.60 billion for the full year.
Street anticipates HPQ to report revenue of $53.66 billion for the fiscal year ending October 2024. Its EPS for the current year is expected to grow 4.4% year-over-year to $3.42. Moreover, thce company surpassed the consensus EPS estimates in three of the trailing four quarters.
HPQ’s shares have soared 12.2% over the past six months to close the last trading session at $30.08. Also, the stock has surged 1.4% intraday.
HPQ’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
HPQ has an A grade for Value and Momentum. Within the Technology – Hardware industry, it is ranked #13.
In addition to the POWR Ratings stated above, one can access HPQ’s additional Growth, Stability, Sentiment, and Quality ratings here.
TaskUs, Inc. (TASK)
TASK offers digital outsourcing services globally, specializing in digital customer experience, trust and safety solutions, and artificial intelligence services. The company’s clientele spans diverse industries such as e-commerce, FinTech, technology, and social media.
On March 04, 2024, TASK partnered with Quavo to enhance its Risk + Response offerings, leveraging Quavo's automated dispute management solutions for financial institutions. This collaboration aims to address fraud and compliance challenges while improving efficiency and customer experience.
On February 23, TASK collaborated with Amazon Web Services (AWS) to enhance its TaskGPT platform with the latest generative artificial intelligence (GenAI) services to improve customer service responses and boost efficiency. TaskGPT delivers secure, GenAI-powered responses in multiple languages, allowing for personalized customer interactions and increased satisfaction.
During the fourth quarter, which ended December 31, 2023, TASK generated service revenue of $234.26 million. It reported an adjusted net income of $32.25 million. The company's adjusted EBITDA and EPS increased 1.9% and 6.1% from the previous-year quarter to $59.02 million and $0.35, respectively.
As of December 31, 2023, the company’s total liabilities reduced to $423.49 million, compared to its total liabilities of $446.40 million as of December 31, 2022.
For the fiscal year 2024, TASK expects revenue to range between $900 million and $950 million. Additionally, the company anticipates a free cash flow of $120 million to $130 million for the same fiscal year.
Analysts expect TASK’s revenue and EPS for the fiscal year (ending December 2025) to increase 7.6% and 11.3% year-over-year to $998.98 million and $1.41, respectively. Furthermore, the company has topped consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
The stock has surged 26.2% over the past six months to close the last trading session at $11.99.
TASK’s sound fundamentals are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
The stock has a B grade for Growth, Value, and Quality. TASK is ranked #17 out of 81 stocks in the Technology - Services industry.
One can see the additional ratings for TASK for Momentum, Stability, and Sentiment 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.
DELL shares were trading at $113.34 per share on Friday morning, down $0.70 (-0.61%). Year-to-date, DELL has gained 48.82%, versus a 9.98% 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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