Tech Stocks: A Focus on Blue Chips Amid Market Pressures

Tech stocks are experiencing volatile conditions. Investors are advised to seek blue-chip options like Verizon, IBM, and Cisco for stability. With Verizon showing recovery and forecasted revenue growth, it could be a favorable investment choice.

Date: 08-03-2025

AI Rating: 7

Earnings Per Share (EPS)
Verizon reported that its adjusted EPS is expected to rise by 2% for 2025, reflecting a recovery in the telecom giant's performance. On the other hand, IBM anticipates an EPS growth of about 4% this year, a transition from the previous years' declines, making its stock potentially appealing.
Revenue Growth
Verizon's projected wireless revenue growth of 2% to 2.8% in 2025, alongside IBM's expected revenue increase of 4%, demonstrates positive trends in both companies' financial health. Cisco, however, is expected to face stagnation, yet analysts foresee a 5% revenue growth in fiscal 2025 once inventory issues are resolved, indicating a potential recovery phase.
Free Cash Flow (FCF)
Verizon's FCF rose by 6% to $19.8 billion, comfortably covering its dividend payments, which is a strong positive signal for stability and return on investments. Similarly, IBM has room to raise its dividend payments as only 52% of its FCF was allocated for dividends, ensuring ample liquidity for growth.
Overall, while Verizon and IBM show promising metrics in revenue growth and EPS, Cisco is in a more precarious position but may recover. The volatility in tech stocks emphasizes the attractiveness of blue-chip stocks as conservative investments amid macro headwinds.

Stocks: VZ IBM CSCO