The technology sector stocks have largely led a bull run and outperformed the S&P 500 index in 2024. The steady decline in the inflation rate since early 2024, the relatively low unemployment rate and consumers’ resilience in some end markets were positive factors driving the growth. Investors have increasingly favored companies with a strong focus on AI advancements.
Despite an overall positive picture, some companies were not able to capitalize on this favorable trend. Global macroeconomic uncertainty, rising geopolitical volatility and supply chain issues impeded the growth of some organizations.
However, based on strong fundamentals, we have shortlisted five stocks that have strong potential for a turnaround in 2025. These stocks are Jabil, Inc. JBL, Keysight Technologies, Inc. KEYS, Akamai Technologies, Inc. AKAM, Universal Display Corporation OLED and Pinterest PINS.
Key Factors
Focus on AI Advancement: The tech sector has been evolving at a rapid pace, and AI is a major factor driving this transformation. AI has become a critical element in fostering innovation across industries, including healthcare, communication, automotive and more. Tech giants and startups are making significant investments in AI capabilities to develop cutting-edge products and bolster their competitive edge in the industry.
Organizations are increasingly adopting AI tools to augment efficiency and productivity across their internal operations. From optimizing production lines in the manufacturing sector to improving customer service with 24/7 virtual assistants, AI is being rapidly adopted to automate repetitive tasks. Businesses are leveraging AI’s ability to process and analyze large pools of data to enhance their decision-making process. For instance, AI tools are enabling enterprises to create targeted marketing campaigns with more precision by analyzing vast consumer behavior data. AI is transforming the logistics and inventory management processes, improving supply chain efficiency. This trend is expected to continue, and AI will play a crucial role in shaping the course of the tech sector in 2025.
Reduced Uncertainty: Uncertainty over U.S. election results was a concern for most of fiscal 2024. The clear and decisive election result in November 2024 has mitigated uncertainty to some extent. The possibility of tax cuts and improved efficiency in government operations under the new administration may act as a tailwind for the tech industry. However, policies related to tariffs can be an overhang for organizations with extensive international exposure.
Diversifying Operations: The year 2024 was one of the most volatile in terms of geopolitics in recent history. The ongoing wars in Europe and the Middle East have been worrisome for U.S. tech sector companies. These conflicts can lead to high energy and raw material costs and disrupt key shipping routes, which can have a far-fetched negative impact. Moreover, the China-U.S. trade relationship also remains uncertain and volatile.
In response to these global uncertainties, several tech sector organizations are steadily diversifying business operations to create a more resilient and versatile supply chain. A well-balanced presence worldwide will make organizations less vulnerable to regional disruptions and enable them to capitalize on opportunities in different markets.
Key Picks
Jabil, Inc.: Headquartered in St. Petersburg, FL, Jabil is one of the largest global suppliers of electronic manufacturing services. The company has recently reorganized its internal structure to align its operations more closely with specific end markets. With this transition, it aims to develop domain-specific expertise in core areas and become more agile in response to market demands.
Solid growth in battery power management and healthy traction in the healthcare and packaging end markets will likely drive growth in the Regulated Industries segment. Growing AI proliferation will likely drive growth in the capital equipment, cloud & data center infrastructure end markets of the Intelligent Infrastructure segment. Growing automation of retail and warehouse operations will likely foster growth in the digital commerce end market.
It has an established global presence and a worldwide connected factory network, enabling it to scale production per the evolving market dynamics. The company’s free cash flow was $1.05 billion in fiscal 2024, and it remains committed to generating $1.2 billion free cash flow in fiscal 2025. A higher free cash flow indicates efficient financial management practices and optimum utilization of assets. Its strategy of integrating advanced AI capabilities to enhance the efficiency of its internal process is a major tailwind.
With an average broker recommendation (ABR) of 1.44, the stock has gained 14.7% over the past year. Earnings estimate for JBL has improved to $8.76 per share from $8.68 per share for 2025 over the past 30 days. It has a long-term earnings growth expectation of 11.89% and delivered an earnings surprise of 3.52%, on average, in the trailing four quarters. Jabil carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Keysight Technologies, Inc.: Based in Santa Rosa, CA, Keysight is a provider of electronic design and test instrumentation systems. The company’s top line is expected to benefit from strength in AI data center infrastructure, semiconductor, aerospace and defense end markets.
Keysight is also expanding its business through collaborations with established sector players. Its partnerships with Softbank, OPPO, ASUS, Motorola, Verizon and Qualcomm are enabling these companies to achieve 5G commercialization-related milestones. Tie-ups with fabless semiconductor companies engaged in providing 5G chipsets, like UNISOC and MediaTek, among others, are also encouraging. Because of these collaborations, Keysight has visibility into customer product roadmaps and is therefore also able to plan its cost structure in advance and estimate future revenues and cash flows more effectively.
With an ABR of 1.32, the stock has gained 1.9% over the past year. Earnings estimate for KEYS has improved to $7.13 per share from $7.07 per share for 2025 over the past 30 days. It has a long-term earnings growth expectation of 12.14% and delivered an earnings surprise of 6.34%, on average, in the trailing four quarters. Keysight currently sports a Zacks Rank #1.
Akamai Technologies, Inc.: Based in Cambridge, MA, Akamai is a global provider of content delivery network (CDN) and cloud infrastructure services. Its platform handles approximately two trillion web interactions on a daily basis. Its solutions help customers address the challenges of bandwidth constraints and Internet traffic and, at the same time, reduce the need for additional hardware to manage traffic loads.
The increasing adoption of cloud computing technologies will likely be a major growth driver for Akamai. The market for API (application programming interface) security is expected to witness substantial growth in the coming years. Akamai is actively pursuing the opportunity. With the acquisitions of Neosec and Noname Security, Akamai has accelerated the advancement of its AI-powered API security solution. By leveraging AI capabilities, the solution effectively analyzes APIs, detects vulnerabilities and minimizes risks. With the growing use of APIs, the demand for such solutions is poised to rise among enterprises.
It has an ABR of 1.65. The stock has declined 18.7% over the past year. Earnings estimate for AKAM has improved to $6.77 per share from $6.71 per share for 2025 over the past 30 days. It has a long-term earnings growth expectation of 6.09% and delivered an earnings surprise of 2.69%, on average, in the trailing four quarters. Akamai carries a Zacks Rank #3 at present.
Universal Display Corporation: Ewing, NJ-based Universal Display is a leading developer of technology and intellectual property (IP) for the Organic Light Emitting Diodes (OLED) market. Universal Display’s dominance in OLED technology is primarily driven by its strong portfolio of around 6,000 patents worldwide. The company’s UniversalPHOLED phosphorescent OLED technology produces OLEDs that are four times more efficient than fluorescent OLEDs and significantly more efficient than current LCDs. This provides Universal Display with a competitive advantage over other OLED makers.
Due to energy efficiency, higher contrast ratio, better viewing angle, lower video response time and smaller form factor OLED is suitable for commercial usage in a number of industries, including smartphones, television, virtual reality devices and automotive.
It has an ABR of 1.63. The stock has declined 22.4% over the past year. Earnings estimate for OLED has declined to $4.84 per share from $4.85 per share for 2025 over the past 30 days. It has a long-term earnings growth expectation of 19.46% and delivered an earnings surprise of 8.95%, on average, in the trailing four quarters. Universal Display carries a Zacks Rank #3 at present.
Pinterest: Headquartered in San Francisco, the company provides a platform to show its users (called Pinners) visual recommendations (called Pins) based on their personal taste and interests. Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which presently appears to be one of the best ad platforms for consumer discretionary brands looking for new ways to reach customers and stretch smaller ad budgets. Through third-party ad integration with Google, Pinterest aims to introduce monetization opportunities in several unmonetized international markets.
The company’s focus on improving operational rigor and incorporation of sophisticated AI models to enhance relevancy and personalization is likely to bring long-term benefits. Healthy traction in emerging verticals like financial services, auto, health and travel are tailwinds. Rising engagement among Gen Z users is a positive factor.
It has an ABR of 1.61. The stock has declined 21.2% over the past year. Earnings estimate for PINS has improved to $1.77 per share from $1.73 per share for 2025 over the past 60 days. It has a long-term earnings growth expectation of 33.39% and delivered an earnings surprise of 17%, on average, in the trailing four quarters. Pinterest currently carries a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
