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. XLK has provided a total return of 43.1% over the past 12 months, well above the Russell 1000's total return of 13.4%, as of September 25, 2020. All statistics in the tables below are as of September 28.
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|
|Market Cap ($B)||12-Month Trailing P/E Ratio|
|NortonLifeLock Inc. (NLOK)||20.90||12.4||3.4|
|Xerox Holdings Corp. (XRX)||17.98||3.8||3.9|
|NCR Corp. (NCR)||19.44||2.5||6.3|
- NortonLifeLock Inc.: NortonLifeLock engages in the consumer cyber safety business, offering solutions that enable consumers to protect their electronic devices, online privacy, identity, and home networks. The company announced in early July the appointment of Natalie Derse to the role of Chief Financial Officer (CFO). Ms. Derse most recently served as the Vice President and CFO of Global Product, Platform, Payments, Risk and Trust at Ebay Inc. (EBAY).
- Xerox Holdings Corp.: Xerox offers digital print technology and related solutions. The company's capabilities include imaging and printing, data analytics, as well as the development of secure and automated solutions to improve productivity. Xerox announced on September 11 that CFO William Osbourn will be leaving the company for personal reasons, effective September 30. Xavier Heiss will serve as interim CFO while the company seeks a permanent successor.
- NCR Corp.: NCR develops and manufactures financial transaction machines and other related products. It produces automated teller machines (ATMs), self-checkout and self-service kiosks, and point-of-sale workstations and scanners. The company also manufactures printer consumable products and manages networks and servers for ATMs and kiosks. NCR announced recently that it has formed a partnership with Microsoft to power its Digital Connected Services Internet of Things (IoT) management software through Microsoft's cloud services business, called Azure.
Fastest Growing Tech Stocks
These are the tech stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Tech Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Salesforce.com Inc. (CRM)||242.74||220.9||2,490|
|WEX Inc. (WEX)||140.13||6.2||418.8|
|NortonLifeLock Inc. (NLOK)||20.90||12.4||375.0|
- Salesforce.com Inc.: Salesforce.com designs and develops cloud-based enterprise software for customer relationship management. The company provides a technology platform for customers and developers to build and run business applications. Salesforce.com reported net income growth of 2,784.6% on revenue growth of 28.9% in Q2 of its 2021 fiscal year (FY), the three-month period ended July 31, 2020. Net income especially benefitted from higher gains on strategic investments and one-time benefits from income taxes compared to the year-ago quarter.
- WEX Inc.: WEX is a provider of payment processing and information management services. It offers payment and transaction processing services for vehicle fleets, business-to-business payments, healthcare payment products, and more.
- NortonLifeLock Inc.: See above for company description.
Tech Stocks with the Most Momentum
These are the tech stocks that had the highest total return over the last 12 months.
|Tech Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Fastly Inc. (FSLY)||91.46||9.6||244.7|
|DocuSign Inc. (DOCU)||212.36||39.3||239.2|
|Enphase Energy Inc. (ENPH)||73.62||9.3||193.8|
|Technology Select Sector SPDR ETF (XLK)||N/A||N/A||43.1|
- Fastly Inc.: Fastly is a provider of cloud-computing services. The company also offers image optimization, security, edge computer technology, streaming solutions, and more.
- DocuSign Inc.: DocuSign is a provider of cloud-based electronic signature solutions. It helps its clients securely collect information, automate data workflows, and sign anything. The company announced in early September the appointment of Cynthia Gaylor, board member and audit committee chair, to the role of CFO. CFO Michael Sheridan was promoted to President of International.
- Enphase Energy Inc.: Enphase Energy provides solar energy cells and monitoring equipment for distributors, large installers, original equipment manufacturers, strategic partners, and homeowners. The company posted a net loss of $47.3 million in Q2 2020 ended June 30, 2020, compared to net income of $10.6 million in the year-ago quarter. Revenue fell 6.4%.
YCharts. "Financial Data." Accessed Sep. 28, 2020.
NortonLifeLock Inc. "NortonLifeLock Appoints Natalie Derse as New Chief Financial Officer." Accessed Sep. 28, 2020.
Xerox Holdings Corp. "Xerox Announces Departure of CFO, Appoints Xavier Heiss Interim CFO." Accessed Sep. 28, 2020.
NCR Corp. "NCR Teams up With Microsoft to Keep Millions of IoT Edge Devices at Retail Stores, Restaurants and Banks Running." Accessed Sep. 28, 2020.
Salesforce.com Inc. "Salesforce Announces Strong Second Quarter Fiscal 2021 Results." Accessed Sep. 28, 2020.
Cision PR Newswire. "DocuSign promotes Sheridan to lead international and welcomes Gaylor as new CFO." Accessed Sep. 28, 2020.
Enphase Energy Inc. "Enphase Energy Reports Financial Results for the Second Quarter of 2020." Accessed Sep. 28, 2020.