The Zacks Analyst Blog Five9, Qualys, Zscaler and VTEX

Tech Sector Performance - The technology sector delivered a stellar performance in 2024, with the Nasdaq Composite Index soaring 28.6%, outperforming the S&P 500's 23.3% rise and the Dow Jones Industrial Average's 12.9% gain [2] - The tech boom was fueled by the widespread adoption of artificial intelligence (AI), high-performance computing, and cloud technologies, with businesses embracing generative AI and advanced analytics, pushing semiconductor demand to new heights [3] - Macroeconomic tailwinds, including Federal Reserve interest rate cuts and easing inflation, boosted investor confidence in growth-focused tech stocks, while stabilized supply chains revitalized hardware production [4] Bargain Tech Stocks - Despite the tech sector's rally, some fundamentally strong companies remained underappreciated or experienced significant declines, offering compelling investment opportunities for 2025 [5] - Five9, Inc, Qualys, Inc, Zscaler, Inc, and VTEX are among the stocks that were overlooked during last year's tech rally, with strong fundamentals and solid growth prospects [6] - These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank 1 (Strong Buy) or 2 (Buy), indicating solid investment opportunities [7] Company Highlights - Five9 provides cloud software for contact centers, with products like workforce management and AI-powered solutions, and its stock plunged 48.4% in 2024, underperforming the Zacks Internet – Software industry's rise of 31.4% [8][9] - Qualys offers cloud security and compliance solutions, with its stock tanking 28.6% in 2024, underperforming the Zacks Security industry's decline of 18.6%, but is poised for a strong recovery in 2025 due to surging demand for security products [10][11] - Zscaler provides enterprise network security services, with its stock plunging 18.5% in 2024, underperforming the Zacks Internet – Services industry's jump of 31.1%, but is well-positioned to benefit from rising demand for cybersecurity solutions [12][13] - VTEX offers a SaaS digital commerce platform, with its stock plunging 14.3% in 2024, underperforming the Zacks Internet – Software industry's growth of 31.4%, but is expected to grow in 2025 due to its robust platform and expansion in Latin America and global markets [14][15] Future Outlook - The tech sector remains a powerhouse, with 2025 promising greater opportunities in AI, cybersecurity, and cloud technologies, making stocks like Five9, Qualys, Zscaler, and VTEX attractive for investors [18]