Heightened volatility caused by macroeconomic factors such as the Fed’s hawkish stance to curb rising inflation, Russia’s invasion of Ukraine, labor issues, supply constraints, and fears of an impending recession has pushed the U.S. to the brink of a bear market.
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Aggravated by such macroeconomic issues, investors are jeopardized to make wise investment decisions. Moreover, multiple firms’ supply-demand imbalance warnings and weak outlooks, along with geopolitical tensions, have dropped investors into murky waters.
As a result, the S&P 500 (SPX) has declined more than 16% so far this year. Particularly, the tech-heavy Nasdaq 100 (NDX) plummeted 25.65%.
Against such a wild backdrop, making informed investment decisions makes sense. Here comes the need for TipRanks’ helpful tools. TipRanks Smart Portfolio tool is one such tool that helps investors make smart investment decisions by taking into account numerous factors such as age, income level, and risk profile.
Moreover, with the help of this tool, investors can compare their portfolios with the best-performing portfolios on TipRanks and gain important information.
Tech is the topmost sector in the best-performing portfolios on TipRanks, with an allocation of 50.67%.
Let’s dig into the fundamentals of two tech stocks that are included in the best-performing portfolios.
Salesforce, Inc. (CRM)
The cloud software behemoth Salesforce provides software solutions for customer relationship management. Interestingly, 2.7% of the Best Performing Portfolio on TipRanks holds CRM.
With a market capitalization of $186.2 billion, Salesforce is gaining traction in the software industry, with strong consumer demand across its products. Recently, the company posted upbeat results for the April quarter and provided a strong earnings outlook driven by operational efficiency.
Looking forward, Salesforce Co-CEO Marc Benioff commented, “While delivering incredible growth at scale, we’re committed to consistent margin expansion and cash flow growth as part of our long-term plan to drive both top and bottom line performance.”
Following the first-quarter earnings release, Wedbush analyst Daniel Ives maintained a Buy rating and a price target of $225 on Salesforce. Ives’ price target implies 20.25% upside potential over the next 12 months.
The five-star analyst opined that the company’s results might have provided a major relief to investors as they indicated strong core enterprise demand despite the current macroeconomic issues.
With a bullish stance on the tech sector, Ives said, “We continue to view this bifurcated tech tape will be driven higher by software, semis, cyber security, and product-driven names (Apple) as part of this digital transformation…”
Overall, consensus among analysts is a Strong Buy based on 29 Buys versus four Holds. The average Salesforce price target of $241.03 implies 28.82% upside potential from current levels. However, shares have lost 26.76% year-to-date amid the broader sell-off due to macro uncertainty.
PayPal Holdings, Inc. (PYPL)
Fintech giant PayPal Holdings operates as an online payments system in multiple countries that supports online money transfers. It constitutes 4.21% of the Best Performing Portfolio on TipRanks.
The strong adoption of digital payments is likely to enhance PayPal’s huge network in the global fintech expanse.
Although macroeconomic issues, competitive pressure, and the reduction in customer engagement remain near-term headwinds, PayPal portrays long-term prospects. The company’s new offerings, the rising popularity of Venmo’s peer-to-peer payment platform, and the integration with Amazon (AMZN), indicate the same.
Recently, Mizuho Securities analyst Dan Dolev said, “Our proprietary survey of Venmo & Apple Pay users shows strong appetite to tap-to-pay with Venmo if Apple opened up its NFC to Venmo.”
“We estimate that tap-to-pay with Venmo could present ~10% TPV and 15-20% top line upside given Venmo’s high in-store take rates and its attractive ACH/stored balance-driven funding mix,” the analyst added.
Consequently, Dolev maintained a bullish stance on the stock with a price target of $120 (42.67% upside potential).
In line with Dolev’s stance, consensus among analysts currently results in a Strong Buy rating, based on 26 Buys, five Holds, and one Sell. The average PayPal price forecast of $127.07 implies 51.08% upside potential from current levels.
Also, Corporate Insiders are positive about the stock. According to the TipRanks Insiders page, corporate insiders have bought shares worth $694,100 in the past three months.
Ending Words
Despite the fact that the tech sector as a whole is experiencing a broader sell-off, these two tech giants are included in TipRanks’ Best Performing Portfolio and, therefore, can be considered wise investments.
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