The ascendancy of the hybrid work culture has mandated that corporations acquire contemporary, state-of-the-art technology, facilitating uninterrupted operational excellence. The rapid stride of digital transformation and the pervasive embrace of cutting-edge technologies are catalyzing substantial tech industry expansion.

In light of these conditions, it seems wise to watch out for fundamentally resilient technology stocks, QUALCOMM Incorporated (QCOM), Dell Technologies Inc. (DELL) and HP Inc. (HPQ), this week.  Let us delve into a comprehensive analysis.

Technology serves as the linchpin for unleashing optimal business performance. Its insatiable demand is poised to endure far into the future, underpinned by continuous investments from consumers, governments, and enterprises, thus guaranteeing a sustained trajectory of upward growth.

The industry's upward trajectory is predominantly stoked by the burgeoning embrace of state-of-the-art technologies, with the proliferation of Artificial Intelligence (AI) and machine learning standing out as catalysts, igniting significant demand for intricately specialized tech components.

Moreover, IoT technology continues to fortify the digital transformation of enterprises, inciting a noteworthy surge in the requisition of interconnected hardware, encompassing sensors, processors, and wireless solutions. As per Mordor Intelligence, the IoT devices market is projected to grow at a CAGR of 23.3% and reach $336.64 billion by 2028.

According to Report Linker, the information technology market is expected to grow at a CAGR of 7.9% and reach $12 trillion in 2027. The escalating need for resilient and energy-efficient computing systems underpins this surge.

In light of these encouraging trends, let’s look at the fundamentals of the three Tech stocks, beginning with number 3.

QUALCOMM Incorporated (QCOM)

QCOM develops and commercializes fundamental wireless technologies on a global scale. The company operates through three distinct segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).

On September 20, QCOM and Charter Communications, Inc. (CHTR) unveiled their collaboration to launch the next-generation Advanced Wi-Fi router. This router is set to provide Spectrum Internet users with Wi-Fi 7 and 10 Gbps capabilities, elevating the connectivity experience for residential and small to medium-sized business customers.

This could allow QCOM to meet the increasing demands of internet users and expand its reach into untapped markets, further solidifying its market leadership in Wi-Fi technology. Moreover, the collaboration grants QCOM access to an extensive customer base and industry expertise, fostering knowledge exchange and potential for future projects.

On September 11, QCOM announced its partnership with Apple Inc. (AAPL) to supply Snapdragon® 5G Modem-RF Systems for smartphone releases in 2024, 2025, and 2026. This could expand QCOM's market presence, ensuring the company's leadership in 5G technologies, bolstering innovation, and driving revenue growth.

For the nine months that ended June 25, 2023, QCOM’s cash inflow from investing activities stood at $1.38 billion, compared to a cash outflow of $5.51 billion in the previous year’s quarter. Also, the company’s net income and EPS came in at $5.74 billion and $5.10, respectively, during the same period.

As of June 25, 2023, QCOM’s cash and cash equivalents amounted to $6.09 billion, compared to $2.77 billion as of September 25, 2022.

The consensus revenue estimate of $37.62 billion for the fiscal year ending September 2024 reflects a 5.4% year-over-year improvement. Likewise, the consensus EPS estimate of $9.18 reflects a 10.6% rise from the prior year. QCOM’s shares have gained 4% year-to-date to close the last trading session at $111.46.

QCOM’s positive fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, equating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

QCOM has a B grade for Value, Momentum, and Quality. It has ranked #13 out of 90 stocks within the Semiconductor & Wireless Chip industry.

In addition to the POWR Ratings I’ve just highlighted, you can see QCOM ratings for Growth, Sentiment, and Stability here.

Dell Technologies Inc. (DELL)

DELL is an end-to-end technology provider that engages in the design, development, manufacturing, marketing, sales, and support of a diverse array of integrated solutions, products, and services. The company's operations are structured into two segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG).

On October 5, DELL announced that it aims for a compounded annual revenue growth of 3%-4%, with non-GAAP diluted earnings per share targeting 8% annual growth or better. It also anticipates efficient resource utilization, returning over 80% of adjusted free cash flow to shareholders through dividends and share repurchases.

Furthermore, DELL plans to increase its existing share repurchase authorization by $5 billion, demonstrating its financial confidence. The company commits to a strong quarterly dividend growth of 10% or more annually through fiscal 2028, solidifying its commitment to delivering value to shareholders and providing an attractive investment opportunity.

During the fiscal 2024 second quarter that ended August 4, 2023, DELL’s net revenue from services increased 6.8% year-over-year to $6 billion. Its non-GAAP operating income rose 1.3% from the year-ago value to $1.98 billion. Also, DELL’s adjusted EBITDA grew 6% from the prior year’s quarter to $2.60 billion.

In addition, the company’s non-GAAP net income and non-GAAP EPS came in at $1.28 billion and $1.74, up 1.3% and 14.3% from the previous year’s quarter, respectively.

The consensus revenue estimate of $94.01 billion for the fiscal year ending January 2025 reflects a 3.5% year-over-year improvement. Likewise, the consensus EPS estimate of $6.79 reflects a 7.8% rise from the prior year. Also, the company topped the consensus revenue and EPS estimates in all four trailing quarters.

DELL has gained 64.9% over the past six months and 104.5% over the past year, closing the last trading session at $69.05.

DELL’s solid outlook is apparent in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.

DELL has an A grade for Sentiment and a B for Growth and Value. It is ranked #7 out of 41 stocks within the B-rated Technology - Hardware industry.

Click here to access additional DELL ratings for Momentum, Quality, and Stability.

HP Inc. (HPQ)

HPQ delivers personal computing and access devices, along with imaging and printing products, supported by corresponding technologies, solutions, and services. The company is structured into three segments: Personal Systems; Printing; and Corporate Investments.

On October 10, HPQ disclosed its strong footing for long-term sustainable growth. In fiscal 2024, it forecasts GAAP diluted net EPS to fall within the range of $2.75 to $3.15 and non-GAAP diluted net EPS to range from $3.25 to $3.65.

Moreover, HPQ envisions a $200 million boost in its Future Ready plan's annualized gross run rate structural cost savings, targeting $1.6 billion by the end of fiscal 2025. Importantly, these cost-saving enhancements won't affect the estimated restructuring and other charges, which are expected to remain at approximately $1.0 billion.

During the third quarter that ended June 30, 2023, HPQ’s net revenue increased 2.2% sequentially to $13.20 billion. Its non-GAAP earnings from operations rose 5.3% from the prior quarter to $952 million. Also, its non-GAAP net earnings and non-GAAP EPS grew 9.4% and 8.9% quarter-over-quarter to $859 million and $0.86, respectively.

Analysts expect HPQ’s revenue to grow 2.5% year-over-year to $55.08 billion for the fiscal year ending October 2024. Similarly, the company’s EPS for the current year is estimated to come in at $3.46, indicating a 5% year-over-year improvement. The stock has gained 8.3% over the past year, closing the last trading session at $26.75.

HPQ’s robust prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.

HPQ has an A grade for Value and a B for Growth.  It is ranked #6 out of 41 stocks within the Technology – Hardware industry.

Click here to access the additional HPQ ratings (Momentum, Sentiment, Quality, and Stability). 

What To Do Next?

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QCOM shares were trading at $109.16 per share on Friday afternoon, down $2.30 (-2.06%). Year-to-date, QCOM has gained 1.30%, versus a 14.04% rise in the benchmark S&P 500 index during the same period.

Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.

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