Technology stocks’ fourth-quarter 2020 earnings results are likely to reflect an uptick in demand for tech-ridden products and services, owing to the rising work-from-home and learn-from-home trends amid the pandemic.

Solid adoption of cloud-computing solutions and internet services, increasing demand for semiconductors, growing proliferation of advanced technologies and rising user penetration on social media platforms are expected to have benefited the tech companies.

Further, a rebound in the automotive space and strengthening PC shipment worldwide are expected to have favored the technology sector in the quarter under review.

Per the latest

Earnings Preview

, 63.7% of companies belonging to the sector have reported their December-end quarter’s results as of Jan 29. Notably, 92.6% of these companies have topped earnings estimates and 88.9% of them have beat revenues estimates. Further, earnings for the companies increased 18.2% year over year on 11.2% higher revenues.

This can be more ascertained by the strong performance of

Apple


AAPL

in the December-end quarter, which benefited from solid demand for Mac, iPad, iPhones and wearables, and strong momentum across its Services segment.

Microsoft

’s

MSFT

recently reported quarterly results, which were driven by strong momentum across Azure, Teams and gaming consoles,also testify the strong performance of the tech sector so far.

Texas Instruments

’s

TXN

fourth-quarter 2020 results reflect an uptrend in personal electronics, owing to the rising demand for electronic gadgets for remote working and entertainment during this pandemic and recovery in the automotive sector.

Additionally, Intel’s fourth-quarter results benefited from increased PC shipment and solid demand for 11th Gen Intel Core processors.

Factors to Consider

The growing proliferation of video conferencing software as a result of the current work-from-home trend is expected to have remained a tailwind in the technology sector. Also, strengthening user penetration for online payment services is anticipated to have been encouraging for tech companies offering digital payment solutions.

Further, the rapid adoption ofAI, Machine Learning (“ML”), cloud products and service, analytics, IoT, 5G deployment, autonomous vehicles, AR/VR, wearables, and other connected devices, which are bolstering the adoption of semiconductor, is expected to have hugely favored the tech companies in the fourth quarter.

Additionally, the rising demand for communication networks and the strong adoption rate of streaming services for entertainment are expected to have been other positives.

However, aslowdown in IT spending, and weakness across small and medium-sized businesses, owing to disruptions caused by COVID-19, are likely to have weighed on the tech companies’ performance in the fourth quarter.

Sneak Peek on Upcoming Releases

Let’s see how the following technology stocks are poised ahead of their quarterly results slated to be reported on Feb 3.

PayPal

’s

PYPL

fourth-quarter 2020 results are expected to have benefited from strengthening user engagements on its platform, owing to shifting customer preference toward contactless payments amid the coronavirus pandemic. Further, strength in product lines such as Venmo and One Touch is expected to have aided growth in its total payment volume in the to-be-reported quarter.

Additionally, growing momentum in the cryptocurrency space is expected to have remained a major tailwind in the quarter under review. Also, the impacts of expanding the international footprint of Xoom are anticipated to get reflected in the company’s fourth-quarter results. (Read more:

PayPal to Report Q4 Earnings: What’s in the Cards?

)

Our proven model conclusively predicts an earnings beat for PayPal this time around. The combination of a positive

Earnings ESP

and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our

Earnings ESP Filter

.

Notably, PayPal has an Earnings ESP of +1.12% and a Zacks Rank #3.

Further, the Zacks Consensus Estimate for earnings has remained stable at $1.00 per share over the past 30 days.

Cognizant Technology Solutions

’s

CTSH

fourth-quarter 2020 results are expected to reflect gains from strong demand for digital engineering, cloud infrastructure, IoT, AI and analytics solutions. Further, its digital bookings are anticipated to have benefited from the ongoing digital transformation across enterprises.

Additionally, the impacts of a steady demand for digital engineering services, digital operations and cloud-based environments are expected to get reflected in the company’s fourth-quarter results.

However, reduced client demand in the travel and hospitality industries, and weakness across select global banking accounts are anticipated to have been concerning. (Read more:

Cognizant to Report Q4 Earnings: What’s in Store?

)

Notably, the Zacks Consensus Estimate for the company’s earnings has remained stable at 90 cents per share over the past 30 days.

Cognizant has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see


the complete list of today’s Zacks #1 Rank stocks here.

ANGI Homeservices

’

ANGI

fourth-quarter 2020 results are anticipated to reflect the benefits of strengthening momentum across the Marketplace platform. This, in turn, is expected to have benefited Marketplace Monetized Transactions and Marketplace Transacting Service Professionals metrics of the company. All these are expected to have driven growth in ANGI’s revenues from North America in the to-be-reported quarter.

Further, the growing traction among List Advertising Service Professionals is expected to have contributed to the fourth-quarter performance of the company.

However, weak momentum across European regions is likely to have been a headwind in the quarter under review.

Notably, the Zacks Consensus Estimate for the company’s loss has remained stable at 3 cents per share over the past 30 days.

ANGI Homeservices has an Earnings ESP of 0.00% and a Zacks Rank #3.

Dynatrace

’s

DT

third-quarter fiscal 2021 results are anticipated to reflect strong demand for its APM solutions and DEM module.

Further, an extension of its Software Intelligence Platform to support all services from Amazon Web Services as well as the integration with ServiceNow’s Service Graph Connector Program is expected to have helped it win customers in the quarter under review.

Further, extended partnership with SAP to make its AI-powered observability and digital experience-monitoring capabilities available in the SAP Commerce Cloud is anticipated to have driven the adoption of Dynatrace’s monitoring capabilities. (Read More:

Dynatrace to Report Q3 Earnings: What’s in the Cards?

)

Notably, the Zacks Consensus Estimate for the company’s earnings has remained stable at 13 cents per share over the past 30 days.

Dynatrace has an Earnings ESP of 0.00% and a Zacks Rank #3.

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