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), Alphabet Inc. (GOOGL), and Microsoft Corp. (MSFT). Tech stocks, as represented by the Technology Select Sector SPDR ETF (XLK), have dramatically outperformed the broader market in 2020 amid the COVID-19 pandemic. In the past 12 months, the sector has provided investors with a total return of 35.4% compared to the S&P 500's total return of 8.7%. These market performance numbers and the statistics in the tables below are as of May 26.
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)||16.98||3.6||3.2|
|NortonLifeLock Inc. (NLOK)||20.24||12.2||3.4|
|Seagate Technology PLC (STX)||50.96||13.1||7.6|
- 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 at the end of March that it was terminating previous plans to continue pursuing an acquisition of HP Inc. (HPQ). The company cited the macroeconomic and market turmoil brought about by COVID-19 as reasons for the decision.
- 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 recently announced the appointment of Gagan Singh to the role of Chief Product 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)||55.17||64.6||1,300|
|NortonLifeLock Inc. (NLOK)||20.24||12.2||620.0|
|Gartner Inc. (IT)||117.61||10.5||260.9|
- Advanced Micro Devices Inc.: Advanced Micro Devices is a global semiconductor company that sells microprocessors, chipsets, graphics, video and multimedia products, and provides assembling, testing, and packaging services. The company reported revenue growth of 40% for Q1 2020, which ended 28 March 2020. AMD also posted its highest gross margin in eight years at 46%.
- NortonLifeLock Inc.: See above for company description.
- Gartner Inc.: Gartner is a research and advisory company, specializing in computer hardware, software, communications, and related information technology.
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)||361.05||222.1||138.1|
|Advanced Micro Devices Inc. (AMD)||55.17||64.6||101.3|
|Apple Inc. (AAPL)||318.89||1,382||76.5|
|Technology Select Sector SPDR ETF (XLK)||N/A||N/A||35.4|
- NVIDIA Corp.: NVIDIA engages in the design, development, and manufacture of computer graphics processors, chipsets, and related multimedia software. The company reported revenue growth of 39% for Q1 2020, which ended 26 April 2020. NVIDIA also posted record gross margin of 65.1%.
- Advanced Micro Devices Inc.: See above for company description.
- 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. Apple reported revenue growth of 1% and diluted EPS growth of 4% for Q2 of its 2020 fiscal year (FY), which ended 28 March 2020. CEO Tim Cook said it was notable that Apple continued to grow despite the global disruption caused by the COVID-19 pandemic.
YCharts. "Financial Data," Accessed May 26, 2020.
Xerox Holdings Corp. "Xerox Provides Update on Proposal to Acquire HP," Accessed May 26, 2020.
NortonLifeLock Inc. "NortonLifeLock Appoints Gagan Singh Chief Product Officer," Accessed May 26, 2020.
Advanced Micro Devices Inc. "AMD Reports First Quarter 2020 Financial Results," Accessed May 26, 2020.
NVIDIA Corp. "NVIDIA Announces Financial Results for First Quarter Fiscal 2021," Accessed May 26, 2020.
Apple Inc. "Apple Reports Second Quarter Results," Accessed May 26, 2020.