The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Cisco (NASDAQ: CSCO) and the rest of the it services & other tech stocks fared in Q1.

The IT and tech services subsector is poised for growth as businesses accelerate cloud adoption, AI-driven network automation, and edge computing deployments. While these seem like big, nebulous trends, they require very real products like switches and firewalls as well as implementation services. On the other hand, challenges on the horizon include intensifying competition from cloud-native networking providers, regulatory scrutiny over data privacy and cybersecurity, and potential supply chain constraints for networking hardware. While AI and automation will enhance network efficiency and security, they also introduce risks related to algorithmic bias, compliance complexity, and increased energy consumption.

The 19 it services & other tech stocks we track reported a mixed Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

Luckily, it services & other tech stocks have performed well with share prices up 15.7% on average since the latest earnings results.

Cisco (NASDAQ: CSCO)

Founded in 1984 by a husband and wife team who wanted computers at Stanford to talk to computers at UC Berkeley, Cisco (NASDAQ: CSCO) designs and sells networking equipment, security solutions, and collaboration tools that help businesses connect their systems and secure their digital operations.

Cisco reported revenues of $14.15 billion, up 11.4% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EPS guidance for next quarter estimates but billings in line with analysts’ estimates.

"Cisco once again had strong quarterly results with clear demand for our technologies," said Chuck Robbins, chair and CEO of Cisco.

Interestingly, the stock is up 12.5% since reporting and currently trades at $68.92.

Is now the time to buy Cisco? Access our full analysis of the earnings results here, it’s free.

Best Q1: Grid Dynamics (NASDAQ: GDYN)

With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ: GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.

Grid Dynamics reported revenues of $100.4 million, up 25.8% year on year, outperforming analysts’ expectations by 2%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance beating analysts’ expectations.

Grid Dynamics scored the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.7% since reporting. It currently trades at $12.86.

Is now the time to buy Grid Dynamics? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: HP (NYSE: HPQ)

Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.

HP reported revenues of $13.22 billion, up 3.3% year on year, exceeding analysts’ expectations by 0.9%. Still, it was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 6.3% since the results and currently trades at $25.56.

Read our full analysis of HP’s results here.

Amdocs (NASDAQ: DOX)

Powering the digital experiences of approximately 400 communications companies worldwide, Amdocs (NASDAQ: DOX) provides software and services that help telecommunications and media companies manage customer relationships, monetize services, and automate network operations.

Amdocs reported revenues of $1.13 billion, down 9.4% year on year. This result was in line with analysts’ expectations. Overall, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ full-year EPS guidance estimates.

Amdocs had the slowest revenue growth among its peers. The stock is up 2.7% since reporting and currently trades at $91.82.

Read our full, actionable report on Amdocs here, it’s free.

DXC (NYSE: DXC)

Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.

DXC reported revenues of $3.17 billion, down 6.4% year on year. This print surpassed analysts’ expectations by 0.9%. More broadly, it was a slower quarter as it produced a significant miss of analysts’ EPS guidance for next quarter estimates.

The stock is down 5.9% since reporting and currently trades at $15.59.

Read our full, actionable report on DXC here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.