Top Tech Stocks for May 2022

HPE, MCHP, and SWCH are top for value, growth, and momentum, respectively

The technology sector is composed 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., Microsoft Corp., and Amazon.com Inc.

Tech stocks, represented by the Technology Select Sector SPDR Fund (XLK), have slightly underperformed the broader market over the past year. XLK has provided investors with a total return of 4.8% over the past 12 months, below the Russell 1000's total return of 5.6%. These market performance numbers and statistics in the tables below are as of April 14, 2022.

Here are the top five tech stocks with the best value, fastest growth, and most momentum.

Best Value Tech Stocks

Value investing is a factor-based investing strategy that involves picking 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 (P/E) ratio. Value investors believe that if a business is cheap compared to its intrinsic value, as measured by its P/E ratio in this case, then its stock price may rise faster than that of others as the price comes back in line with the worth of the company. These are the tech stocks with the lowest 12-month trailing P/E ratio.

Best Value Tech Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Hewlett Packard Enterprise Co. (HPE) 15.38 20.0 5.5
Mandiant Inc. (MNDT) 22.35 5.2 5.9
CDK Global Inc. (CDK) 54.44 6.4 6.4
Dell Technologies Inc. (DELL) 46.94 35.7 6.7
HP Inc. (HPQ) 37.47 39.5 6.7

Source: YCharts

  • Hewlett Packard Enterprise Co.: Hewlett Packard Enterprise sells a broad range of products and services in areas including cloud services, high performance computing & AI, software, and storage. Globally, the company has 55,000 customers and its edge networking connects 10 million devices.
  • Mandiant Inc.: Mandiant is a provider of cyber defense solutions, cybersecurity incident response, and strategic readiness consulting. The company has threat researchers, engineers, intelligence analysts, and incident responders located in 26 countries. On March 8, the company announced that it would be acquired by Google LLC in an all-cash transaction valued at approximately $5.4 billion. Mandiant is expected to join Google Cloud. The acquisition is anticipated to close later this year.
  • CDK Global Inc.: CDK Global provides integrated data and technology products to the automotive, heavy truck, recreation, and heavy equipment industries. The company's technology helps automotive dealerships and original equipment manufacturers (OEMs) to streamline and maximize the capabilities of their operations. CDK Global has more than 30,000 retail client locations. On April 7, CDK Global announced that it had agreed to be acquired by Brookfield Business Partners L.P. and its institutional partners for a total enterprise value of $8.3 billion. Brookfield Business Partners is the public vehicle of Brookfield Asset Management’s private equity group. The acquisition is expected to close in Q3 2022.
  • Dell Technologies Inc.: Dell Technologies designs, develops, and manufactures desktop computers, workstations, notebooks, displays, projectors, and other products. The company also offers multi-cloud, big data, and storage services. Dell has a sales force of 39,000 and operates in 180 countries around the world.
  • HP Inc.: HP sells desktop and notebook computers, workstations, retail point-of-sale systems, displays, printers and hardware, and support and services. HP’s customers include individual consumers, businesses, and governments. The company holds 27,000 patents and operates in 170 countries throughout the world. On March 28, HP announced it would acquire Poly, also known as Plantronics Inc., a maker of video conferencing and phone equipment and software. The total enterprise value of the transaction is $3.3 billion and it is expected to close by the end of the year. The company said the acquisition is expected to boost HP's portfolio of growth-oriented businesses and to strengthen its operations in the hybrid work space.

Fastest Growing Tech Stocks

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 most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in a company’s success. 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Tech Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Microchip Technology Inc. (MCHP) 65.22 36.3 785.7 30.0
Western Digital Corp. (WDC) 46.34 14.5 795.0 22.6
Avnet Inc. (AVT) 37.13 3.7 689.5 25.6
TD Synnex Corp. (SNX) 100.78 9.7 -18.9 213.2
National Instruments Corp. (NATI) 38.71 5.1 650.0 14.4

Source: YCharts

  • Microchip Technology Inc.: Microchip Technology makes microcontrollers and analog semiconductors for roughly 122,000 customers across the industrial, automotive, consumer, aerospace and defense, communications, and computing markets.
  • Western Digital Corp.: Western Digital develops, manufactures, and sells data storage devices and solutions. Its operations are organized across two broad categories: hard disk drives and flash-based memory, the latter of which is a semiconductor technology. Its products are used by cloud, Internet, and social media infrastructure companies to build data centers. The company holds roughly 13,700 active patents worldwide. On April 14, Western Digital announced that it would continue its long-standing joint-venture partnership with Japan-based computer memory maker Kioxia Corp. The two companies are jointly investing in a flash memory manufacturing facility at the Yokkaichi Plant in Japan. Initial production is expected to begin in the fall of 2022.
  • Avnet Inc.: Avnet is a maker of electronics components, primarily semiconductors. Its products are used in a broad array of areas, including in The Internet of Things (IoT), devices, hardware and software, and integration. It offers over 250 locations in 48 countries and ships roughly 157 billion units annually.
  • TD Synnex Corp.: TD Synnex sells information technology (IT) services and products. It offers a portfolio of products used in areas such as cybersecurity, big data and analytics, and mobility. The company employs 22,000 and serves more than 150,000 customers and vendors in over 100 countries. On April 6, the company announced the launch of the Azure Virtual Desktop, a new managed virtual desktop, designed for use by new and remote employees, and customers. The platform will allow businesses to offer remote desktop capabilities to users located anywhere and on any device.
  • National Instruments Corp.: National Instruments, known as NI, makes automated testing and measurement equipment for the semiconductor, transportation, aerospace, defense, and government, and industrial machinery industries, among others. The company was founded over 40 years ago. National Instruments reported results for Q4 2021 ended Dec. 31, on Jan. 27, 2022. For that quarter, it reported a more than eightfold increase in net income on rising net sales YOY. Performance was driven by record quarterly orders, which increased by 19% YOY. The company plans to announce results for Q1 2022 after market close on April 28.

Tech Stocks With the Most Momentum

Momentum investing is a factor-based investing strategy that involves investing in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that 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 tech stocks that had the highest total return over the past 12 months.

Tech Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Switch Inc. (SWCH) 30.81 4.5 80.9
Palo Alto Networks Inc. (PANW) 626.78 61.7 73.6
Fortinet Inc. (FTNT) 331.76 53.4 66.5
Arista Networks Inc. (ANET) 126.58 39.0 62.0
Gartner Inc. (IT) 298.10 24.5 58.1
Russell 1000 Index N/A N/A 5.6
Technology Select Sector SPDR Fund (XLK)  N/A N/A 4.8

Source: YCharts

  • Switch Inc.: Switch is a technology infrastructure company. It develops hyperscale retail colocation data centers reaching large numbers of servers to help grow Internet and related services. The company serves over 950 customers in industries including technology and digital media, cloud and managed services, finance, telecommunications, and more.
  • Palo Alto Networks Inc.: Palo Alto Networks is a network security company. It provides firewalls to identify and control applications, scan content, prevent data leaks, and perform a variety of other services. The company serves over 80,000 enterprise customers.
  • Fortinet Inc.: Fortinet is a cybersecurity company serving enterprises, service providers, and government organizations worldwide. Its Security Fabric platform leverages AI and machine learning technology to provide clients with security solutions for networked, application, cloud, and mobile environments. The company has more than 500,000 customers around the world.
  • Arista Networks Inc.: Arista Networks is a cloud computing firm that focuses on providing services to large-scale datacenter and campus environments. It has shipped more than 50 million cloud networking ports worldwide.
  • Gartner Inc.: Gartner sells consulting and research services to IT and business executives in areas including risk management, and technology investment. Gartner has about 16,000 employees in over 90 offices around the world. On Feb. 8, the company reported results for Q4 2021, ended Dec. 31, 2021. For that quarter, Gartner posted a 75.1% year-over-year (YOY) increase on net income on a 17.4% YOY increase in total revenues. The company's research, conferences, and consulting businesses all reported solid revenue growth for the period.

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 adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in 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.

Article Sources

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  1. YCharts. “Financial Data.”

  2. Hewlett Packard Enterprise Co. "HPE Reports Fiscal 2021 Fourth Quarter and Full-Year Results," Page 4.

  3. Hewlett Packard Enterprise Co. "Why HPE."

  4. Mandiant Inc. "About Mandiant."

  5. Mandiant Inc. "Google to Acquire Mandiant."

  6. CDK Global. "About."

  7. CDK Global Inc. "CDK Global To Be Acquired By Brookfield for $54.87 Per Share in Cash."

  8. Dell Technologies Inc. "Form 10-K for the fiscal year ended January 29, 2021," Pages 5-6.

  9. HP Inc. "Form 10-K for the fiscal year ended October 31, 2021," Page 4.

  10. HP Inc. "HP: Who We Are."

  11. HP Inc. "HP Inc. to Acquire Poly."

  12. Microchip Technology Inc. "Form 10-Q." Page 30.

  13. Western Digital Corp. "Annual report for the fiscal year ended July 2, 2021," Page 4.

  14. Western Digital Corp. "Kioxia and Western Digital Jointly Invest in New Flash Memory Manufacturing Facility in Yokkaichi Plant."

  15. Avnet Inc. "Avnet Company Profile," Pages 1-2.

  16. TD Synnex Corp. "TD SYNNEX Launches New Managed Virtual Desktop Solution to Solutions Factory."

  17. TD Synnex Corp. "About Us."

  18. National Instruments Corp. "Annual report for the fiscal year ended December 31, 2020," Pages 3-4.

  19. National Instruments Corp. "NI Achieves Record Financial Performance for Q4 and Fiscal Year 2021."

  20. National Instruments Corp. "Q1 2022 NATI Earnings Conference Call."

  21. Switch Inc. "Company Profile."

  22. Palo Alto Networks Inc. "Company."

  23. Fortinet Inc. “About Us.”

  24. Arista Networks Inc. "About Arista."

  25. Gartner Inc. "About Gartner."

  26. Gartner Inc. "Gartner Reports Fourth Quarter 2021 Financial Results," Page 8.

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