Technology stocks set to thrive until year-end

Since the beginning of the year until June 10, the most significant representative of the technology stock group, FPT, has broken its peak over 27 times, currently trading at over $5.875 per share.

The upward momentum of FPT's stock has pushed its market capitalisation to a record nearly $7.3 billion, an increase of $2.275 billion compared to the beginning of the year, making it the fifth-largest capitalized company in the market.

According to VNDirect's June analysis report, FPT's stock price has surged since news of its collaboration with NVIDIA emerged, with the current price-earnings ratio (P/E) standing at 25.5x, the highest ever.

Not only FPT but with many other positive catalysts, the technology stock group has maintained its allure for capital inflows and has been the market focal point for over the year, including FOX, CMG and VGI.

Sharing insights at the second ‘Vietnam Wealth Advisors Summit 2024’ hosted by Vietnam Investment Review (VIR) on May 6, Le Duc Khanh, director of analysis at VPS Securities said, “VPS analysis categorises companies into eight different groups, based not only on stock codes but also on their expected performance in the same period and cycle. Regarding the outlook for technology stock investments, I consider the IT sector to be in Group 1, characterised by outstanding business performance, as evidenced by the compound growth and superior stocks of companies like FPT and CMG.”

Le Duc Khanh, director of analysis at VPS Securities, shared insights at the summit

“Group 2 includes stocks with exceptional growth, such as restructured companies showing gradual explosive growth and cyclical groups. I also rank IT and telecommunications stocks in Group 2 for their strong growth potential.”

The market is reacting positively to the semiconductor story, especially as semiconductor-related stocks have been heavily revalued in the last three years.

Similarly, an MBS report evaluates the collaboration with the giant NVIDIA in April as a significant boost for FPT. The comprehensive cooperation with NVIDIA to promote AI research is expected to provide long-term revenue growth momentum for FPT, as generative AI becomes a new trend in the IT industry.

“The market is expected to surpass 1,300 points this year and fluctuate within the 1,350-1,400 range. With the ongoing volatility in the stock market this June, the figures are likely to be more positive,” Khanh said.

In reality, money flow has spread quite widely to small and medium-sized technology stocks. For example, the stock TTN of Vietnam Technology and Telecommunication JSC has recently seen consecutive limit-up sessions, reaching nearly $1 per share.

The impressive rise of TTN started in March, recording double-digit growth in just three months. Despite the overheated price, this stock is still in high demand, with nearly 900,000 units of limit-up buy orders recorded in the June 5 session.

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