Across the board, 2019 was an exceptional year for US equities. The declining trade tensions between the US and China, a moderate Federal Reserve and the optimism that the economy would not slip into a recession drove the markets higher. The results: both the benchmark and the tech-heavy achieved their largest annual percentage gain since 2013, while the year ended with the largest annual percentage increase since 2017.
S&P 500, Dow Jones, Nasdaq Annual performance
Although there are sufficient reasons to be careful with the stock market in 2020, the following companies are likely to continue to provide shareholders with impressive returns in the coming year.
1. Mega-Cap Tech Stock: Apple
Apple (NASDAQ 🙂 shares rose in 2019 and are positioned to rise further in 2020. The shares of the iPhone maker ended the year at a peak of $ 293.65 on Tuesday, rising 86% in 2019, more than better than the benchmark The annual profit of S&P 500 of around 29%. It was again the best-performing FAANG share this year with a large margin. The tech giant based in Cupertino, California has a market capitalization of $ 1.3 trillion, making it the most valuable company trading on the US stock exchange.
Apple & # 39; s 2019 rally was fueled by signs of better-than-expected demand for the iPhone product flagship. In addition, Wall Street was encouraged by Apple's wearables segment – led by Apple Watch and AirPods – and subscription services, including Apple TV + and Apple Arcade.
Looking ahead to 2020, the company is expected to get a boost with the introduction of new model iPhones that are compatible with high-speed 5G networks, which US carriers are starting to roll out. Some analysts think this is a key to unlocking as many as 200 million upgrades from consumers who use older iPhone models.
The iPhone maker is also ready to take advantage of the improvement in trade relations between the US and China, since it generates 20% of its total sales from the Asian nation.
Taking all this into account, we expect Apple's shares to continue its strong upward trend in the coming 12 months.
Three extras Mega-Cap Tech Plectrums
Microsoft (+ 54% in 2019)
Amazon (+ 22% in 2019)
Alphabet (+ 28% in 2019)
Microsoft (NASDAQ 🙂 and Amazon.com (NASDAQ 🙂 shares are expected to have another strong year, as both companies must continue to benefit from the rapid expansion of their cloud computing offering.
The robust experience of Google parent Alphabet (NASDAQ :), (NASDAQ 🙂 in 2019 probably predicts a lot of good for the search giant, who also has ambitions to climb the ladder in the booming cloud computing space.
2. Software-As-A-Service Stock: Payment location
Paylocity (NASDAQ :), a leading provider of cloud-based payroll and human capital management (HCM) software solutions, saw its share collection at astonishing levels in 2019. Shares of the company, which started trading at the start at $ 58.89 from 2019, it rose 100% in the year to settle at $ 120.82 on Tuesday, as the strong demand for its cloud-based HCM software-as-a-service (SaaS) is gaining. The Illinois-based provider of human resource software has a market capitalization of approximately $ 6.5 billion.
The powerful rally of Paylocity seems to be continuing into the new year, encouraging investors through the growing acceptance of the enterprise cloud company's human resource solutions in small and medium-sized organizations. The services are used to process payroll administration, manage human resources and recruit talent.
In a sign of how robust the demand for its SaaS offering is, the software company surprised the profit for everyone, with sales growth of 20% in every period. Revenue for the fiscal second quarter – provisionally planned for February 6 – is expected to be between $ 129.5 million and $ 130.5 million, which would mean a Y-o-Y revenue of 21.5%.
Despite the fact that we made a triple profit in 2019, we expect the positive trend in Paylocity's stock to continue in 2020, given the company's growing demand for HCM software services.
Three Additional SaaS Plectrums
Paycom (+ 116% in 2019)
Trade Desk (+ 123% in 2019)
Okta (+ 80% in 2019)
Similar to Paylocity, the outlook appears bright for fellow human resource software provider Paycom (NYSE :), who has had a strong demand for his cloud-based human capital management software-as-a-service.
One of the big winners of 2019, Trade Desk (NASDAQ :), is looking forward to a strong 2020 thanks to the popularity of the self-service software platform, where customers can purchase and manage data-driven digital advertising campaigns.
After its inventory increase in 2019, Okta (NASDAQ :), one of the fastest growing cloud-based cyber security companies, should continue to perform well thanks to the strong demand from large companies for cloud-based identity and access management software.
3. Chip Stock: Advanced Micro Devices
Advanced Micro Devices (NASDAQ 🙂 was the best performing of the S&P 500 in 2019, with shares reaching 146% when investors encouraged the chip maker's ability to build market share at the expense of its larger rivals. The stock closed Tuesday at $ 45.86 – the highest point ever reaching $ 48.50 at the peak of the dot-com bubble in June 2000 – after the start of the year at $ 18.01. The company, based in Santa Clara, California, has a market capitalization of approximately $ 51.0 billion.
Despite the fact that shares were seen more than double last year, AMD remains one of the most promising names in 2020, as the market share continues to take away from Intel (NASDAQ 🙂 and NVIDIA (NASDAQ 🙂 in the central processing units (CPU) and graphic processing units (GPU) space.
With an emphasis on the growing demand for chips, the company is expected to publish its best quarterly revenue since 2005 when it appears on January 29. Consensus calls for a revenue increase of 48% compared to the same period a year earlier to $ 2.1 billion.
As such, we continue to expect a significant benefit from here and we recommend collecting CPU and GPU developer shares.
Three Additional Chip Picks
NVIDIA (+ 76% in 2019)
Lattice Semiconductor (+ 176% in 2019)
KLA Tencor (+ 99% in 2019)
NVIDIA (NASDAQ 🙂 appears to be one of the big winners of the US-China trade, because it is one of the tech companies with the largest percentage of their total sales from sales to China, with 56%.
Lattice Semiconductor (NASDAQ 🙂 remains in top position to continue to enjoy growth in its 5G, artificial intelligence and server security companies, making it a good bet for the future.
Despite the astonishing performance of last year, the big rally in KLA-Tencor (NASDAQ 🙂 shares could just start due to the competitive position in various chip equipment:
