2 Tech Stocks That Could Soar 40% or More, According to Wall Street Analysts

Driven by solid third-quarter earnings reports, the technology industry has been attracting increased investor attention and the tech-heavy Nasdaq has been rallying lately. Investors’ interest in tech stocks is evidenced by the Technology Select Sector SPDR Fund’s (XLK) 11.3% and 22.5% respective returns over the past six months and year-to-date.

Furthermore, the technology industry is expected to grow in the coming months with rising investments in the industry, data center capacity expansion, rapid 5G deployment, among several other developments.

So, we think it could be wise to bet on quality tech stocks Incyte Corporation (INCY) and Kulicke and Soffa Industries, Inc. (KLIC). Wall Street analysts expect these two stocks to soar more than 40% in price the near term.

Incyte Corporation (INCY)

INCY is a Wilmington, Del.-based biopharmaceutical company that is focused on discovering, developing, and commercializing proprietary therapeutics in the U.S. and internationally. Its offerings include JAKAFI, PEMAZYRE, and ICLUSIG. In addition, it has a portfolio of selective janus associated kinases 1 (JAK1) inhibitors.

On September 27, Syndax Pharmaceuticals and INCY announced a global collaboration to develop and commercialize Axatilimab for chronic graft-versus-host disease and other fibrotic diseases. Briggs W. Morrison, M.D., Syndax CEO, said, “Incyte is a proven leader in the development and commercialization of many important innovative therapies, including a treatment for GVHD. We are thrilled to be working alongside this talented and determined team to combine our expertise as we strive to provide new treatment options for patients in desperate need of effective interventions.”

For the second quarter, ended June 30, 2021, INCY’s revenue increased 2.6% year-over-year to $705.71 million. The company’s non-GAAP operating income came in at $365.87 million for the six months ended June 30, 2021, versus a $320.97 million loss in the year-ago period. In addition, its cash, cash equivalents, and marketable securities were $2.08 billion for the period ended June 30, 2021, compared to $1.8 billion for the year ended December 31, 2020.

INCY’s revenue is expected to be $3.43 billion in its fiscal year 2022, representing a 20.4% year-over-year rise. The company’s EPS is expected to increase 828.6% year-over-year to $3.06 in the current year. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters.

The stock has gained 1.4% in price since hitting its 52-week low of $64.08 on October 13, 2021, to close yesterday’s trading session at $64.97. Wall Street analysts expect the stock to hit $93.90 in the near term, which indicates a potential 44.5% upside.

INCY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

INCY has an A grade for Quality, and a B grade for Value and Sentiment. Within the Biotech industry, it is ranked #10 out of 491 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, and Stability for INCY.

Click here to checkout our Healthcare Sector Report for 2021

Kulicke and Soffa Industries, Inc. (KLIC)

Based in Singapore, KLIC designs, manufactures, and sells capital equipment and tools to assemble semiconductor devices. It operates in two segments: Capital Equipment and Aftermarket Products and Services (APS).

On September 22, 2021, KLIC announced the shipment of its next-generation mini and micro-LED platform--LUMINEX™--to a leading LED manufacturer. This is an indication of the increasing demand for the company’s products and services.

KLIC’s net revenue increased 182% year-over-year to $424.32 million for its fiscal third quarter, ended July 3, 2021. The company’s gross profit increased 181.9% from the same period last year to $195.69 million. Also, its EPS came in at $1.79, up 894.4% year-over-year.

Analysts expect KLIC’s revenue to be $1.50 billion in its fiscal year 2021, representing a 140.9% year-over-year rise. The company’s EPS is expected to increase 532.6% year-over-year to $6.01 in the current year. In addition, it surpassed the Street’s EPS estimates in three of the trailing four quarters.

Over the past nine months, the stock has gained 50.9% in price to close yesterday’s trading session at $54.24. Wall Street analysts expect the stock to hit $87.75 in the near term, which indicates a potential 61.8% upside.

It’s no surprise that KLIC has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Momentum, Growth, Value, and Quality.

KLIC is ranked #13 of 98 stocks in the Semiconductor & Wireless Chip industry. Click here to see the additional POWR Ratings for KLIC (Stability and Sentiment).

Click here to checkout our Semiconductor Industry Report for 2021

INCY shares were trading at $65.60 per share on Thursday afternoon, up $0.63 (+0.97%). Year-to-date, INCY has declined -24.58%, versus a 23.48% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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