High-growth technology stocks, which sold strongly earlier this year at one point, have been reviving lately. Investors are now returning to the sector at the expense of economy-linked stocks such as , , and .
That development has pushed the Index to new all-time highs this week as technology trading returned to favor.
NASDAQ Composite Daily Chart
Given the new favorable investor sentiment towards technology, here are three names to consider as high-growth technology stocks get another chance.
1. CrowdStrike
Performance to date: +7.8%
Market Cap: $52.7 Billion
CrowdStrike Holdings (NASDAQ:), whose technology is used to detect and prevent security breaches, has been experiencing some turbulence lately.
After rallying to a record high of $250.42 on Feb. 16, CRWD stock quickly tumbled to a low of $168.67 on March 5, amid a general sell-off of high-growth technology names.
CrowdStrike shares have since recouped some losses, closing at $228.34 last night, but they are still about 9% below their recent all-time high.
The Sunnyvale, California-based cybersecurity specialist, whose stock is up nearly 8% in the past 12 months and 145% in the past 12 months, has a valuation of $52.7 billion.
CrowdStrike Daily Stock Chart
CrowdStrik reported a huge blow and revenue when it announced its first quarter financial results on June 3, benefiting from increased corporate cybersecurity spending.
The company's financial results now exceed consensus estimates in every quarter since its IPO in June 2019.
Adjusted earnings per share totaled $0.10, an astonishing 400% increase from adjusted earnings per share of $0.02 a year ago. Sales, meanwhile, rose 70% year-over-year to a record $302.8 million, easily exceeding expectations for $291.5 million in sales.
Even more impressive, CrowdStrike said its annual recurring revenue (ARR) — a key sales metric — is up 74% from the same period last year to hit a record high of $1.19 billion.
The cybersecurity company said it added 1,524 net new subscription customers in the quarter, reflecting rising demand for its cloud-based Falcon cybersecurity platform. It now has a total of 11,420 customers, up 82% from the same period a year earlier.
Additionally, CrowdStrike management sounded optimistic about the outlook for the coming months, forecasting revenue growth of nearly 62% in the second quarter to $321.3 million.
"We believe the robust demand environment driven by secular trends such as digital and security transformation, cloud adoption and an increased threat environment provides a runway for long-term sustainable growth," said George Kurtz, CrowdStrike co-founder and chief executive officer executive, in a statement.
2. Roku
Performance to date: +2.4%
Market capitalization: $45 billion
After a remarkable gain of nearly 150% in 2020, shares of Roku (NASDAQ:) rocketed another 46% at one point in early 2021, ahead of a sell-off in tech companies that continued during the the COVID pandemic have taken some wind out of the streaming video platform's sails.
ROKU shares ended Tuesday at $339.88, about 30% below its all-time high of $486.50 on Feb. 16. last year — has a market cap of about $45 billion.
Roku reported a surprising profit when it released its first quarter financials on May 6, along with better-than-expected sales, which were up 79% from the same period a year earlier.
The streaming video platform has now surpassed or matched Wall Street expectations for 15 consecutive quarters dating from the third quarter of 2017, thanks to rapid user growth, which has translated into higher ad revenue.
Roku added 2.4 million active accounts in the first quarter, bringing the total to 53.6 million. Those accounts spent a remarkable 18.3 billion hours streaming through Roku's hub, up from 17.0 billion in the previous quarter.
To add to those encouraging numbers, Roku's average revenue per user (ARPU) – a key sales metric – clocked in at a double-digit win rate, up 32% year-over-year to a record high of $32.14.
"Advertisers continued to monitor audiences and shift budgets to TV streaming, with Roku's monetized video ad servings more than doubling year on year," the company said in its earnings release.
Looking ahead, Roku management gave a positive outlook for the current quarter, with earnings and sales forecasts boosting thanks to robust growth in its core ad revenue business.
Despite recent volatility, we expect ROKU stocks to rise further in the coming weeks and months as the current work environment has created a perfect backdrop for the streaming media platform to thrive.
3. Pinterest
Year-to-date performance: +7%
Market cap: $44.9 billion
Pinterest (NYSE:) stocks – which were one of the big winners of 2020 – have seen a slower rise this year, rising just 7% year-to-date as investor sentiment cooled on high-growth tech stocks that surged during the COVID-19 pandemic.
PINS stock – still up 233% in the past 12 months – ended last night at $70.55, giving the San Francisco, California-based image-sharing social media platform a market cap of about $44 .9 billion.
At current levels, it remains more than 21% below the recent all-time high of $89.50, scaled on Feb. 16.
Pinterest Daily Stock Chart
Pinterest reported revenues that easily exceeded estimates when it released its first quarter financial results in late April, driven by strong ad spend and continued international expansion.
It has now surpassed Wall Street's earnings and sales expectations for four consecutive quarters.
The social media company reported adjusted earnings of $0.11 per share, beating consensus estimates of $0.06 per share. Revenue of $485.2 million grew 78% year-over-year, exceeding expectations for revenue of $471.7 million.
Pinterest said global monthly active users (MAUs) are up 30% from a year ago to 478 million, slightly missing estimates of 479.4 million. The number of active users in the US totaled 98 million, up 9% year-on-year, while international MAUs grew 37% to 380 million.
Looking ahead, Pinterest's Q2 guidance made it clear that the social media network doesn't expect a slowdown in the coming months, with revenue growth expected to be a staggering 105% from a year ago to $558 million.
In addition, Pinterest said it expects global MAUs to grow by a percentage in the mid-teens, while US user growth is expected to be flat year-on-year.
"As pandemic lockdowns eased in some parts of the world in mid-March, we started to see signs of less engagement and user growth on Pinterest, and we assume this means people are spending more time offline," Chief Executive Ben Silbermann said during the company's earnings call. "While it's impossible to say how people will behave as we move into the summer months, we expect this trend to continue," he added.
Despite concerns about a slowdown in user growth, Pinterest remains well positioned to remain one of the luminaries in the burgeoning social media space, driven by strong advertiser demand and the positive results of its continued international expansion.
