Tech Stocks to Buy in October Before Q3 Earnings and Hold

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Today’s episode of Full Court Finance at Zacks discusses where the stock market stands as Wall Street prepares for the start of third-quarter earnings season.

The episode then digs into two of the first major technology stocks set to report earnings in October—Taiwan Semiconductor (TSM) and Netflix (NFLX)—to see why investors might want to buy the stocks before their upcoming earnings releases and hold for the long haul.

See the Zacks Earnings Calendar to stay ahead of market-making news. 

Wall Street sat on its hands on Wednesday and Thursday as it waits for updates on the conflict between Israel and Iran and the dockworkers’ strike.

October is a historically weak month during election years, which means investors shouldn’t be surprised if there is more volatility and selling heading into the presidential election.

Thankfully, despite partisan politics, Wall Street is largely apolitical in that investors are always looking to make money no matter who is office. For instance, average annual stock market returns during the Trump and Obama administrations—which included periods of unified and divided governments—were nearly identical: 16.0% and 16.3%, respectively.

The next major market-mover (not including what might happen in the Middle East or with the longshoremen strike) is almost certain to be third quarter earnings season.

Wall Street knows consumers are under pressure. The Tech and Finance sectors are the only two of the 16 Zacks sectors enjoying positive estimate revisions for third quarter earnings. This backdrop likely puts a lot of pressure on big tech to impress.

The two stocks we dive into today have soared over the last decade and the past year, and their earnings estimates are greatly improved compared to where they were this time last year.

 

Why Taiwan Semiconductor Stock is a Must-Own Tech and AI Investment

 

Taiwan Semiconductor Manufacturing Co. TSM reports its Q3 2024 earnings results on Thursday, October 17.

Taiwan Semi or TSMC is a straightforward long-term investment in technology, spanning data centers, semiconductors, smartphones, artificial intelligence, and the yet-to-be-imagined.  

Taiwan Semi physically builds the most advanced chips on the market, boasting clients from Nvidia NVDA to Apple. Taiwan Semi is ramping up its industry-leading 3-nanometer production, helping fuel the AI boom. TSMC reportedly grabbed 61% of the semiconductor foundry market in the fourth quarter of 2023, blowing away second-place Samsung’s 14%.

Zacks Investment Research
Zacks Investment Research


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Taiwan Semi’s semiconductor foundry-only business model helped TSMC evolve into the most dominant force in an industry that is the bedrock of all modern technology. Taiwan Semi’s moat is growing, and TSMC is addressing geopolitical fears by expanding its manufacturing footprint outside Taiwan.