The technology sector is comprised of businesses that sell goods and services in electronics, software, computers, artificial intelligence, and other industries related to information technology (IT). The sector includes companies with the largest market capitalizations in the world such as Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN).
Tech stocks, as represented by the Technology Select Sector SPDR ETF (XLK), have dramatically outperformed the broader market, providing investors with a total return of 32.2% compared to the S&P 500's total return of 11.6% over the past 12 months. These market performance numbers and the statistics in the tables below are as of July 23.
Here are the top 3 tech stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Tech Stocks
These are the tech stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Tech Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Xerox Holdings Corp. (XRX)||16.94||3.6||3.2|
|NortonLifeLock Inc. (NLOK)||20.70||12.2||3.4|
|Seagate Technology PLC (STX)||49.47||12.7||7.4|
- Xerox Holdings Corp.: Xerox offers digital print technology and related solutions. The company's offerings include imaging and printing, data analytics, and secure and automated solutions. Xerox was pursuing an acquisition of HP Inc. (HPQ) prior to the economic turmoil caused by the coronavirus pandemic. The company issued a statement in late March indicating that it was withdrawing its tender offer to acquire HP.
- NortonLifeLock Inc.: NortonLifeLock engages in the consumer cyber safety business, offering solutions that enable consumers to protect their electronic devices, online privacy, identity, and home networks. The company announced earlier this month that it had appointed Robert Clarkson to the newly created role of Chief Commercial Officer.
- Seagate Technology PLC: Seagate Technology is engaged in the development, production, and distribution of data-storage products and solutions. The company offers hard disk drives, other storage products, and data-recovery services.
Fastest Growing Tech Stocks
These are the tech stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Tech Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Advanced Micro Devices Inc. (AMD)||61.79||72.4||1,300|
|NortonLifeLock Inc. (NLOK)||20.70||12.2||620.0|
|Gartner Inc. (IT)||124.67||11.1||260.9|
- Advanced Micro Devices Inc.: Advanced Micro Devices is a global semiconductor company that offers products such as microprocessors, chipsets, graphics, video and multimedia products, and provides assembly, testing, and packaging services. The company reported in late April that revenue grew 40% to a record $1.79 billion during Q1 2020, which ended March 28, 2020. AMD's gross margin also hit its highest level in eight years at 46%.
- NortonLifeLock Inc.: See above for company description.
- Gartner Inc.: Gartner is a research and advisory company with expertise in computer hardware, software, communications, and related information technology. In early May, the company reported net income growth of 261.1% on revenue growth of 5.0% for Q1 2020, which ended March 31, 2020.
Tech Stocks with the Most Momentum
These are the tech stocks that had the highest total return over the last 12 months.
|Tech Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|NVIDIA Corp. (NVDA)||417.55||256.8||144.4|
|Apple Inc. (AAPL)||389.09||1,686||90.0|
|Advanced Micro Devices Inc. (AMD)||61.79||72.4||88.1|
|Technology Select Sector SPDR ETF (XLK)||N/A||N/A||32.2|
- NVIDIA Corp.: NVIDIA engages in the design, development, and manufacture of computer graphics processors, chipsets, and related multimedia software. In late May, the company reported revenue growth of 39% and record GAAP gross margin of 65.1% for Q1 2020, which ended April 26, 2020.
- Apple Inc.: Apple is engaged in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and a variety of other related software, services, and networking solutions. At the end of April, the company reported revenue growth of about 1% while revenue for its services business grew to a record high $13.3 billion for Q2 FY 2020 ended March 28, 2020.
- Advanced Micro Devices Inc.: See above for company description.
YCharts. "Financial Data." Accessed Jul. 23, 2020.
Xerox Holdings Corp. "Xerox Provides Update on Proposal to Acquire HP." Accessed Jul. 25, 2020.
NortonLifeLock Inc. "NortonLifeLock Completes New Leadership Team With Two Seasoned Consumer Tech Leaders." Accessed Jul. 25, 2020.
Advanced Micro Devices Inc. "AMD Reports First Quarter 2020 Financial Results." Accessed Jul. 25, 2020.
Gartner Inc. "Gartner Reports First Quarter 2020 Financial Results," page 1. Accessed Jul. 25, 2020.
NVIDIA Corp. "NVIDIA Announces Financial Results for First Quarter Fiscal 2021." Accessed Jul. 25, 2020.
Apple Inc. "Total Revenue Grows, Services Revenue Reaches New All-Time High of $13.3 Billion." Accessed Jul. 25, 2020.