On today’s episode of Full Court Finance at Zacks, we take a look at two tech stocks from very different areas of the economy, Nvidia NVDA and Etsy ETSY, ahead of the release of their upcoming quarterly earnings results to see if either stock might be worth buying.
The Nasdaq fell last week, after it closed at new records on February 12. The recent downturn continued on Monday, with the tech-heavy index down around 1.5% through late afternoon trading to start the last week of February. Peloton PTON, Tesla TSLA, Zoom Video ZM, and other big pandemic winners posted some of the biggest declines. Meanwhile, Apple AAPL, Microsoft MSFT, and many other giants also fell, as bond yields continued their recent rise, which has highlighted the tech sector’s somewhat stretched valuations.
Despite the recent downturn, market fundamentals remain strong and most of the big tech names have posted blowout earnings. Plus, the outlook for the first quarter and the rest of 2021 has improved significantly, and the vaccine rollout will hopefully help the economy return to something like normal later this year (also read: Earnings Start Growing Again).
On top of that, Wall Street seems to have bet on increased government spending. Therefore, the recent pullback is likely healthy, as the market had continued to hit new highs in 2021.
With this in mind,we dive into semiconductor standout Nvidia ahead of its Q4 earnings release on Wednesday. The stock has soared 120% in the last year, but it has cooled off over the past six months and it has lagged its industry during the trailing three months, up just 12%. This might make NVDA more enticing, as the GPU giant continues to expand its reach into data centers and beyond.
Moving on, Etsy has not only crushed NVDA in the last year, it has outclimbed Shopify SHOP and is neck-and-neck with Tesla. The e-commerce firm has created a solid niche within the booming market that helped it grow long before the pandemic, and a recent dip could set up a better buying opportunity.
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Microsoft Corporation (MSFT): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Etsy, Inc. (ETSY): Free Stock Analysis Report
Zoom Video Communications, Inc. (ZM): Free Stock Analysis Report
Peloton Interactive, Inc. (PTON): Free Stock Analysis Report
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