7 tech stocks that are most worthy of “cheap”: Micron’s forward price-earnings ratio is only 5.8 times


This year has been a brutal year for U.S. stocks, and technology stocks have been hit hard, with the Nasdaq $IXIC down 22.46% for the year. Rising bond yields and recession fears have been weighing on the tech sector since late last year.

Fortunately, U.S. stocks recovered last week and stopped the losing streak. The Nasdaq rebounded nearly 7% for the week.

Bank of America had previously predicted that in order to avoid worsening economic conditions, the Fed may pause in September to tighten policy.

JPMorgan Chase bluntly stated in the report that the stock market may be close to bottoming out, as the amount of corporate buybacks announced so far this year has reached a record $429 billion, stronger than the same period in 2019 and 2021.

So what's there to watch when market sentiment turns positive?

Micron Technology ranks first in the “cheap” list, with a forward price-earnings ratio of only 5.8 times

Barron's has compiled a list of tech stocks that are “worth picking up bargains” as U.S. stocks pick up. The criteria for listing are: Nasdaq 100 $NDX constituents that have fallen more than 20% this year (calculated for dividend impact), and forward P/E ratios below 16.7 times (average of S&P 500 constituents, based on expected 2023 revenue) , while sales are expected to grow by at least 8% in 2023.

In the end, only 7 stocks met the above screening criteria.

In terms of forward P/E ratios, the cheapest on this list is Micron Technology $MU. Shares are down 21% so far this year and trade at a forward price-to-earnings ratio of 5.8, with sales expected to rise 20.3% in 2023.

Chip giant Qualcomm $QCOM is No. 2 on the list, with its shares down 23% this year. It is understood that the company is increasing investment in improving business diversity to reduce its dependence on Apple orders, and it is making efforts in the fields of automobiles, VR (virtual reality) and computers.

Shares of Facebook, which changed its name to Meta $FB last year, fell more than 42% in 2022, and its earnings report said the shift in focus to the “metaverse” would be expensive. The company's advertising business is also challenged by TikTok and Apple's $AAPL privacy reforms that have upended the company's successful model of advertising on mobile devices. But Barron's believes the stock is a bargain given the company's 12.6 times forward price-to-earnings ratio and 16.3% sales growth forecast.

This was followed by Applied Materials $AMAT and Lim Research $LRCX. The two semiconductor equipment makers trade at 13.5 and 14.1 times forward earnings, respectively.

At the bottom of the list are Google $GOOGL and Netflix $NFLX. Google trades at 15 times forward earnings and is expected to grow sales by 16.3% in 2023. Notably, macroeconomic concerns could put some pressure on Google's search and cloud businesses in the coming months. Last Tuesday, the stock price of snapchat $SNAP, which is also in the Internet industry, plunged 43% after the earnings report missed expectations. The company's CEO Evan Spiegel said: “The macroeconomic environment is definitely deteriorating faster than we expected,” he said, adding The company is slowing hiring to manage spending more carefully, it said.

Netflix's stock price has fallen sharply because of the loss of users. Currently, the company trades at a forward price-to-earnings ratio of 15.6, with an expected sales growth rate of 9.1% in 2023.


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