Tech Stocks Can Double Again in 2021

Tech Stocks Can Double Again:

2020 was an excellent year for technology actions. Some fast-growing names have doubled, tripled, or increased. 2021 so far has not lived up to the expectations of many of these companies.

Forget the growth of cryptocurrencies and the recession cycle, digital payments are a growing industry

Nicholas Rossolillo (Square): Square has received a lot of attention for its significant Bitcoin holdings in its balance sheet and Bitcoin’s growing profits from trading in the Cash app (a subsidiary of Square). Even after Bitcoin fell by about 40% overall, it has increased by almost 450% since the beginning of 2020. It is no wonder that Square’s shares have risen by around 250% in the same period.

But Square is more than just a gamble on the cryptocurrency craze. Square intelligently leverages the Bitcoin trading capabilities of the Cash app to integrate a large number of new users at a low cost. Once in its ecosystem, it can cross-sell from other sources, such as digital payments and cash transactions, a debit card linked to a Cash App account, a newly acquired tax return service, or integration with the large network.

Square continues to grow year after year thanks to the financial results of the Cash App. Revenue from requests for money (excluding Bitcoin-related revenue) increased 201% in the first quarter of 2021 to $ 529 million. This incredible pace will undoubtedly decrease with progress in 2021, but an additional catalyst is needed to overcome it. the supplier ecosystem, hit hard by pandemic barriers last year when many retailers using Square had to temporarily close. The supplier ecosystem grew 19% in the first quarter to $ 1.02 billion last year but is expected to accelerate in the next two quarters.

Square is certainly not profitable based on free cash flow. It is currently spending a lot to maximize the expansion of digital payments and financial technology. Free cash flow was $ 16.2 million with revenue of $ 13.2 billion in the last 12 months. But Square will be very profitable. The gross profit margin was 57% in the first quarter, excluding Bitcoin shares, up from 49% in the previous year, when it gained many new users. As we grow faster, it is not inconceivable that Square will double its current market value from $ 101 billion again this year.

The first recipe for a ten-year growth trend

Anders Bylund (Applied Materials): Applied Materials, a supplier of semiconductor materials and equipment, has grown by more than 150% in the past 52 weeks due to the global shortage of chip manufacturing capacity. Given the limited production capacity, many microchip designers pay a high price for the materials and labor they can get today. In last week’s second quarterly report, sales of applied materials increased 41% over the previous year and profit margins increased. According to CEO Gary Dickerson, this is just the beginning of a long-term growth trend.

“We are still at the beginning of the main secular trends that will emerge in the next decade and that will structurally expand the semiconductor and semi-equipment market,” Dickerson said at the conference. “For the first time advising clients on investments in the coming years, a new and important sign of the demand for sustainability”

The yields of the materials used are supported by excellent commercial results. The stock does not look expensive after its massive 52-week run, trading at a modest 19x gain and seven times less than the sale. The company has an artificial momentum with a shortage of short-term semiconductors and a long-term growth market. I wouldn’t be surprised if you doubled your inventory of applied materials before the end of the year, and it’s a solid long-term inventory as well.

This title opens the era of big data

Billy Duberstein (Lam Research): Lam Research, a leader in semiconductor devices, rose 132% last year, but I wouldn’t be surprised if its stocks doubled again. See recent quarterly data: Q1 grew 53.7%

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