The Nasdaq 100 rose after the Fed announced a 75 basis point rate hike for the second month in a row and hinted it was halting policy tightening based on economic data. That, along with better-than-expected corporate earnings, should help the index remain resilient in the near term. So it might be wise to invest in fundamentally sound Nasdaq 100 stocks Adobe ( ADBE ), Autodesk ( ADSK ), Dollar Tree ( DLTR ), and Gilead Sciences ( GILD ). Continue reading….
The Nasdaq 100 won more than 4% after the Federal Reserve announced a 75 basis point interest rate hike in response to multi-decade high inflation for the second consecutive month. That marked the Nasdaq’s biggest rally since November 2020.
The stock market rallied yesterday despite the contraction in US GDP 0.9% for the second consecutive quarter. Better-than-expected corporate earnings could help the Nasdaq 100 remain resilient in the near term.
Therefore, we think it might be wise to invest in fundamentally sound Nasdaq 100 stock Adobe Inc. (ADBE), Autodesk, Inc. (ADSC), Dollar Tree, Inc. (DLTR), and Gilead Sciences, Inc. (GOLD).
Adobe Inc. (ADBE)
ADBE operates as an internationally diversified software company. It operates through three segments: digital media, digital experience and publishing and advertising.
Last month, ADBE announced innovations for its customer data platform (CDP), Adobe Real-Time CDP, to help brands move from third-party cookies to proprietary data. As businesses across industries adopt Adobe Real-Time CDP, ADBE introduces commerce-enriched customer profiles, AI-based targeting, new privacy and security tools, and Segment Match across channels.
Additionally, last month ADBE expanded its partnership with The Home Depot to enhance the customer experience. As part of the company’s interconnected commerce strategy, a seamless experience extends to e-commerce, an award-winning mobile app and in-store services such as pick-up lockers and an in-app product locator. With so many touch points, the ADBE partnership will provide comprehensive insights into the customer journey.
ADBE’s total revenue rose 14.4% year-over-year to $4.39 billion in the second quarter ended June 3, 2022. Its non-GAAP operating income grew 12% from last year’s value to $1.97 billion, while its non-GAAP net income was $1.59 billion, up 8.9% year-over-year previous The company’s non-GAAP EPS rose 10.6% year over year to $3.35.
Analysts expect ADBE’s revenue to rise 12.9% year-over-year to $4.44 billion for the third quarter ending Aug 2022. The consensus estimate of $3.35 represents an improvement of 7, 7% year-over-year for the third quarter ending August 2022. It has gained 10.2% over the past month.
The ADBE POWR ratings reflects this promising perspective. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR ratings evaluate stocks by 118 different factors, each with its own weighting.
The stock also has an A for Quality and a B for Sentiment. Within the F classification Software – Application industry, ADBE ranks number 31 out of 154 stocks
Click here to see additional POWR ratings for ADBE’s growth, value, stability and momentum.
Autodesk, Inc. (ADSC)
ADSK provides 3D design, engineering and entertainment software and services worldwide. The company provides AutoCAD Civil 3D, surveying, design, analysis and documentation solutions for civil engineering, including land development, transportation and environmental projects.
In April, ADSK announced that it will adopt Autodesk Construction Cloud and build a powerful construction management platform into its standard operating procedures (SOPs). Evans teams will use Autodesk Construction Cloud to rapidly onboard new employees, maximize coordination among project stakeholders, and minimize project errors.
In March, ADSK signed a definitive agreement to acquire The Wild, a cloud-connected augmented reality (XR) platform that includes its namesake solutions, The Wild and IrisVR. This acquisition enables Autodesk to meet the growing needs for augmented reality (AR) and virtual reality (VR) technological advances within the AEC industry and to further support AEC customers throughout the project lifecycle.
For the first quarter ending April 30, 2022, ADSK’s total net revenue increased 18.3% year-over-year to $1.17 billion. Its operating income grew 59.7% year-over-year to $214.00 million, while its net income amounted to $146.00 million. The company’s EPS was $0.67 for the quarter.
ADSK’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to a buy in our POWR rating system. The stock also has an A grade for Quality and a B grade for Growth. Within the software industry – applications, it ranks number 28.
In total, we rate ADSK at eight different levels. Beyond what we’ve said above, we’ve also given ADSK ratings for Stability, Value, Sentiment and Momentum. Get all ADSK scores here.
Dollar Tree, Inc. (DLTR)
DLTR operates a variety of discount retail stores. It has two operating segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers consumable goods such as candy and food, health and personal care, as well as everyday consumables. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise.
In the first quarter ending April 30, 2022, DLTR’s total revenue increased 6.5% year over year to $6.9 billion. Its operating income grew 40.7% from last year’s value to $731.50 million, while its net income amounted to $536.40 million, up 43, 2% more than its value of the previous year. The company’s EPS improved 48.2% year over year to $2.37.
The consensus estimate of $1.59 for the second quarter ending July 2022 represents a 29.7% year-over-year improvement. Analysts expect DLTR’s revenue to rise 7% year-over-year to $6.78 billion for the second quarter ending July 2022. The stock is up 16.2% year-to-date.
It’s no surprise that DLTR has an overall rating of B, equivalent to a Buy in our POWR rating system. DLTR is graded B for Growth and Sentiment. In the classification A Grocery Stores/Big Box industry, ranks number 26 out of 38 stocks.
Click here to see additional POWR ratings for DLTR (Stability, Momentum, Value and Quality).
Gilead Sciences, Inc. (GOLD)
GILD, a biopharmaceutical company discovers, develops and commercializes medicines in areas of unmet medical need in the United States, Europe and internationally. The company offers products Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/Eviplera, Stribild and Atripla.
This month, GILD and the European Commission signed a new Joint Procurement Agreement (JPA) that will ensure continued swift and fair access to Veklury for participating member states of the European Union (EU) and the European Economic Area (EEA). . The deal covers the acquisition of Veklury for the next twelve months and has an option to extend for an additional six months.
For the first quarter ending March 31, 2022, GILD’s total revenue rose 2.6% year over year to $6.59 billion. Its operating income amounted to $197.00 million, while its net income was $12.00 million. The company’s EPS was $0.02 for the quarter.
The EPA consensus estimate of $1.41 for the fourth quarter ended December 2022 represents year-over-year growth of 104.9%.
GILD’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of A, which equates to a strong buy in our POWR rating system. The stock also has an A for Value and a B for Sentiment and Quality. Within the F classification Biotechnology industry, ranks #7 out of 400 stocks.
In total, we rate GILD on eight different levels. Beyond what we’ve said above, we’ve also given GILD ratings for stability, growth and momentum. Get all GILD scores here.
ADBE stock was trading at $409.06 per share Friday afternoon, up $5.56 (+1.38%). Year-to-date, ADBE has declined -27.86%, compared to a -12.68% increase in the benchmark S&P 500 over the same period.
About the Author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst focused on the stock market. With its ability to interpret financial data, it aims to help investors assess a company’s fundamentals before investing.
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