Investors are apparently shrugging off the risk of recession. Not only is the S&P 500 up almost 8% in 2023, but the Nasdaq 100 has gained nearly twice as much, jumping 15% in the first five weeks of the new year. That's a marked turnaround from last year's 33% loss, but you don't have to assume more risk to ride this new wave of enthusiasm for growth.
While much of the growth for the tech heavy index this year is being helped along by the performance of electric car stocks -- Lucid is up 70% while Tesla is 54% higher -- a segment that could face a rocky future with China dropping subsidies for all-electric cars,https://chinadialogue.net/en/digest/china-ends-electric-vehicle-subsidies/ there are stocks that still have a solid future and are attractive priced.
The following three tech stocks are your best bet to buy in February.
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Apple
Apple (AAPL -1.32%) keeps getting written off by analysts, yet it's riding 18% higher year-to-date. As the most heavily weighted stock in the Nasdaq 100, it might be having an impact on the index's performance this year, too, but there's good reason to think it will still be a long-term winner for investors.
The stock was pummeled last year (down 27%) as fears of a slowing economy, inflation, and rising interest rates would take a toll on consumer spending. And on the face of it, they were right. In its just-reported earnings report, Apple said revenue fell, missing expectations for the first time in six years, iPhone sales faltered, and lingering concerns about China's Covid crackdown that saw widespread lockdowns in major cities.
Yet Apple is taking more of its chip design in-house to save money and control, while stating it plans to be the latest customer of Taiwan Semiconductor Manufacturing (TSM -0.70%) at its new Arizona facilities. That should minimize any supply chain concerns.
Foxconn also reported its January revenue hit a record $22 billion as operations returned to normal with China easing travel restrictions. Foxconn, of course, is the largest assembler of iPhones for Apple.
The tech giant has 2 billion active devices across all of its products, double what it was seven years ago; it has its enhanced, new M2 chip on the market, and services is a growing portion of Apple's business. With the unique set of circumstances last year that hindered production and supply behind it, look for Apple to continue its long-term growth trajectory while continuing to subvert analyst expectations.
Honeywell International
Technology conglomerate Honeywell International (HON -1.01%) reported earnings the same day as Apple, but its results weren't as well received, despite beating earnings estimates because it missed on revenue and its forecast for the coming year was comparatively weak.
The same sort of supply chain issues that held up the iPhone maker impacted Honeywell, which it says "remains a gating factor to volume growth." While that was specific to its aerospace division, it can be applied company wide.
Even so, Honeywell saw organic growth of at least 10% in three of its four operating segments and both orders and backlog continue to expand. And it's still generating significant free cash flow, some $2.1 billion worth in the fourth quarter.
Honeywell also continues to return value to shareholders through stock buybacks and dividend payments. Last year it repurchased $4.1 billion worth of shares and paid out $2.7 billion in dividends, while also raising the payout for the 13th time in 12 years.
It remains a strong and diversified company with its thumbprint in some of the most important segments of the economy and positioning itself for success in a variety of industries.
Honeywell is a top-notch technology growth stock that is a smart pick for your portfolio in February.
