The technology sector is comprised of businesses that sell goods and services in electronics, software, computers, artificial intelligence (AI), 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, represented by the Technology Select Sector SPDR ETF (XLK), have outperformed the broader market. XLK has provided investors with a total return of 87.7%, above the Russell 1000's total return of 83.1% over the past 12 months. These market performance numbers and all statistics in the tables below are as of March 23, 2021.
Here are the top 5 tech stocks with the best value, the fastest growth, and the most momentum.
Value investing is a factor-based investing strategy in which you pick stocks that you believe are trading for less than what they are intrinsically worth, usually by measuring the ratio of the stock's price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings ratio (P/E Ratio). Value investors believe that if a business is cheap compared to its intrinsic value, in this case as measured by its P/E ratio, the stock price may rise faster than others as the price comes back in line with the worth of the company. These are the stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio.
|Best Value Tech Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Vontier Corp. ( VNT)||31.15||5.3||10.0|
|Synnex Corp. ( SNX)||108.93||5.6||11.4|
|HP Inc. ( HPQ)||29.58||36.9||12.5|
|Intel Corp. ( INTC)||63.48||257.9||12.9|
|Arrow Electronics Inc. ( ARW)||104.69||7.8||14.0|
- Vontier Corp.: Vontier is a global industrial technology company with a focus on smart transportation and mobility. Its expertise is in areas such as mobility technologies, retail and commercial fueling, fleet management, and vehicle diagnostics and maintenance. The company employs more than 8,300 people in over 150 locations around the world.
- Synnex Corp.: Synnex provides IT supply chain services to the technology industry, including distribution, logistics, and integration services. Synnex distributes over 30,000 technology products from manufacturers around the world and provides technology solutions to more than 20,000 resellers and retail customers. The company recently announced that it has agreed to merge with Tech Data Corp., a wholesale technology distributor. The merger deal was valued at $7.2 billion, including net debt, and is expected to close in the second half of 2021.
- HP Inc.: HP is a global provider of personal computing, imaging, and printing products and services. The company's products include desktop and notebook computers, workstations, retail point-of-sale systems, displays, printers, and other items. HP serves individual consumers, businesses of all sizes, and government customers. The company holds 27,000 patents and operates in 170 countries throughout the world. HP announced in late February that it has agreed to acquire HyperX, the gaming division of Kingston Technology Co. Inc. Under the terms of the agreement, HP will pay $425 million for HyperX's gaming peripherals portfolio. The transaction is expected to close in Q2 2021.
- Intel Corp.: Intel designs and manufactures computer components and related products, including processors, chipsets, server products, memory and storage. Its products are designed for a range of traditional and emerging computing technologies, including 5G networks, cloud computing, and AI. Intel employs a global workforce of around 110,600 people. The company recently announced plans to increase its semiconductor manufacturing capacity, starting with two new factories in Arizona. The expansion represents an investment of about $20 billion, and could help to alleviate the global semiconductor shortage.
- Arrow Electronics Inc.: Arrow Electronics is a distributor of electronic components, computer systems, peripherals, software, and mass storage products. The company has roughly 20,000 employees worldwide. It supplies more than 180,000 technology manufacturers as well as customers in other industries.
These are the top tech stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Tech Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Advanced Micro Devices Inc. ( AMD)||78.38||94.9||866.7||52.5|
|Square Inc. ( SQ)||223.20||101.5||-28.9||140.5|
|DXC Technology Co. ( DXC)||26.46||6.7||1,240||-14.6|
|SolarWinds Corp. ( SWI)||16.99||5.4||950.0||7.2|
|Aspen Technology Inc. ( AZPN)||148.46||10.1||225.9||85.5|
- Advanced Micro Devices Inc.: Advanced Micro Devices is a global semiconductor company. AMD sells microprocessors, chipsets, graphics processing units (GPUs), development services, server and embedded processors, and technology for game consoles. The company's operations span more than 35 locations throughout the world.
- Square Inc.: Square is a financial services and online payments company. It provides merchants with hardware solutions for processing debit and credit card transactions, as well as point-of-sale and other payment and business-management software. The company also provides a Cash App for individual consumers, enabling them to easily send and receive money and access other financial services. At the end of 2020, Square had over 210 million buyer profiles and approximately 295 million items listed by sellers on its platform. Square announced in early March that it has completed the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions for its industrial bank, Square Financial Services. Square's approval for the charter is conditional on its bank maintaining significantly higher levels of capital than other banks, and Square must consent to examination by the FDIC. The bank is expected to open in Utah some time this year.
- DXC Technology Co.: DXC Technology is a provider of information technology services and products. DXC specializes in IT modernization, including both on-premises and cloud services. The company serves 6,000 customers across the private and public sectors globally.
- SolarWinds Corp.: SolarWinds provides IT infrastructure management software. Its products enable enterprises to monitor and manage the performance of their IT environments, whether it's on-premises, in the cloud, or via hybrid models. The company serves more than 275,000 customers worldwide. SolarWinds is currently being investigated by several government agencies, including the U.S. Justice Department, the Securities and Exchange Commission (SEC), and various state Attorneys General after its software was compromised last year in a cyber attack by suspected Russian hackers. The hackers infected software developed by SolarWinds with malicious code, thus compromising critical systems of a long list of major U.S. corporations, small companies, and also a number of U.S. government agencies. SolarWinds said that it was cooperating and providing information related to the investigations.
- Aspen Technology Inc.: Aspen Technology makes software that enables customers to better design, operate, and maintain their complex manufacturing environments. The company currently is developing AI solutions to embed throughout industrial manufacturing environments. Aspen Technology serves more than 2,300 customers worldwide. The company announced in early March the appointment of Chantelle Breithaupt to the roles of senior vice president and chief financial officer (CFO). Breithaupt most recently served as senior vice president of finance for Cisco Systems Inc.'s (CSCO) Customer Experience organization.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock's outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the 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 (%)|
|Enphase Energy Inc. ( ENPH)||155.97||21.0||467.0|
|Square Inc. (SQ)||223.20||101.5||457.9|
|HubSpot Inc. ( HUBS)||457.85||21.2||323.9|
|Bill.com Holdings Inc. ( BILL)||155.65||12.8||317.4|
|The Trade Desk Inc. ( TTD)||724.31||34.3||310.0|
|Technology Select Sector SPDR ETF (XLK)||N/A||N/A||87.7|
- Enphase Energy Inc.: Enphase Energy is a renewable energy company. It designs and manufactures solar panels, energy storage, and other products. The company employs more than 800 people worldwide and operates in 21 countries. Enphase Energy announced in early February that it has agreed to acquire the Solar Design Services business of DIN Engineering Services LLP. Financial terms of the transaction, which is expected to close by March 31, 2021, were not disclosed.
- Square Inc.: See above for company description.
- HubSpot Inc.: HubSpot sells cloud-based marketing and sales software to corporate customers. It offers customer relationship management (CRM), content management software (CMS), marketing and sales, and other business management solutions. HubSpot serves more than 100,000 customers in over 120 countries. The company announced in mid-February that it has agreed to acquire The Hustle, a media company that produces a newsletter, podcast, and premium research content. Neither the financial terms of the transaction nor the expected closing date were disclosed.
- Bill.com Holdings Inc.: Bill.com provides cloud-based software that aims to simplify, digitize, and automate back-office operations for small and midsize businesses (SMBs). The company helps SMBs to better manage their cash inflows and outflows. Bill.com serves more than 80% of the top 100 U.S. accounting firms.
- The Trade Desk Inc.: The Trade Desk offers a cloud-based platform enabling customers to create, manage, and optimize more expressive data-driven digital advertising campaigns. Marketers can use the platform to tailor ad campaigns across ad formats such as display, video, audio, native and and social. The company announced in mid-January the appointment of Michelle Hulst to the role of chief operating officer (CFO). Hulst previously served as Trade Desk's executive vice president, Global Data and Strategy.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
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