S&P 500 Insights: Key Tech Stocks Present Opportunities

S&P 500 Insights reveals a persistently low percentage of stocks outperforming the index despite recent gains. Firms like Dell Technologies and ASML Holdings are highlighted as undervalued stocks poised for growth amidst shifting market dynamics.

Date: 26-01-2025

AI Rating: 6

Market Overview
The report highlights a concerning trend where less than 30% of stocks have outperformed the S&P 500, a 30-year low. Despite these trends, it suggests value hunting for stocks that have the potential to recover and outperform.

Dell Technologies (NYSE: DELL) is noted for a solid 50.6% increase in 2024, with a valuation of 19 times trailing earnings. The data center segment, contributing around 70% to Dell's profits, is highlighted as a growth driver as AI spending is anticipated to shift in favor of on-premises solutions.

ASML Holdings (NASDAQ: ASML) appears intriguing despite its high valuation, trading at over 40 times earnings. However, the report posits that this valuation is relatively normal for ASML, considering its market position and the anticipated demand for its EUV technology.

On Semiconductor (NASDAQ: ON) demonstrates resilience with over $400 million in net income despite a 19% revenue decline last quarter. The company's strategic pivot towards higher-margin chips signifies a long-term growth trajectory despite current downturns in the automotive and industrial segments.

Key Metrics:
1. **Earnings Per Share (EPS)**: Net income for On Semiconductor is specifically mentioned, but not for Dell or ASML.
2. **Revenue Growth**: Dell's data center growth is significant, while On Semiconductor is facing a decline.
3. **Net Income**: On Semiconductor's last quarter shows robust profit generation despite market challenges.
4. **Profit Margins**: ASML's EUV technology promises high margins despite current concerns.

In summary, while several companies face challenges in a fluctuating market, those with strong fundamentals and growth potential like Dell and ASML appear to be opportunities for investors looking for value amid volatility.

Stocks: DELL ASML ON