Apple Inc. (AAPL), Intel Corporation (INTC), QUALCOMM, Inc. (QCOM): 3 Large-Cap Tech Stocks to Buy on the Taper Tantrum

Leader in wireless chips

QUALCOMM, Inc. (NASDAQ:QCOM) hasn’t had the worst of years with an 11% gain, but the S&P 500 has generated double that return during the same period. Though not seen as a stock to purchase for its dividend, it now offers a 2.3% yield while trading at only 12 times forward earnings estimates.

The company is a leading developer of wireless communications technologies and should only benefit from the ever-growing demand for advanced chips needed in smartphones and tablets. Analysts expect earnings to grow 18% a year for the next five years, suggesting the current valuation offers a compelling entry point. Amazingly, QUALCOMM, Inc. (NASDAQ:QCOM) is worth over $100 billion, so investors should be cautioned that 18% growth might be aggressive for that size.

Bottom line

As the market overreacts to the signals by the Fed that it will eventually need to reduce its aggressive bond buying program, investors should look to shift into large cap tech stocks. Investors need to remember that even with reduced bond buying, the Fed is far from increasing the Fed funds rate from historical lows. Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), and QUALCOMM, Inc. (NASDAQ:QCOM) should be strong gainers as the economy eventually grows fast enough to support a reduction in Fed action. As that occurs, tech stocks will offer a safety area in the markets as rate-sensitive stocks and bonds in general get hit.

The article 3 Large-Cap Tech Stocks to Buy on the Taper Tantrum originally appeared on Fool.com and is written by Mark Holder.

Mark Holder and Stone Fox Caplital Advisors, LLC own shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, Intel, and Qualcomm. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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