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. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN).
Tech stocks, represented by the Technology Select Sector SPDR Fund (XLK), have outperformed the broader market over the past year. XLK has provided investors with a total return of 37.9% over the past 12 months, above the Russell 1000’s total return of 35.3%. These market performance numbers and statistics in the tables below are as of Sept. 17, 2021.
Here are the top five tech stocks with the best value, fastest growth, and most momentum.
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, in this case as measured by its P/E ratio, then the stock price may rise faster than 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|
|CDK Global Inc. (CDK)||42.35||5.1||5.0|
|HP Inc. (HPQ)||27.68||31.9||8.6|
|Arrow Electronics Inc. (ARW)||113.23||8.1||10.2|
|TD SYNNEX (SNX)||115.29||11.1||11.3|
|Intel Corp. (INTC)||54.26||220.1||12.1|
- CDK Global Inc.: CDK Global provides integrated data and technology solutions to the automotive, heavy truck, recreation, and heavy equipment industries. The company helps automotive dealerships and original equipment manufacturers (OEMs) to optimize and streamline their daily operations. CDK Global has more than 30,000 retail client locations.
- HP Inc.: HP is a global provider of personal computing, imaging, and printing products and services. The company’s offerings include 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. HP announced in late July that it agreed to acquire Teradici Corp., a provider of remote computing software that enables users to securely access high-performance computing from a range of devices. Financial terms of the agreement, which is expected to close by the end of this year, were not disclosed.
- Arrow Electronics Inc.: Arrow Electronics is a global provider of electronic components, computer products, and enterprising computing solutions to OEMs, contract manufacturers, and other commercial customers. The company distributes batteries, displays, sensors, memory products, and a wide range of other electronic components. It also offers related services, solutions, and software. The company has roughly 20,000 employees worldwide and more than 180,000 customers in technology manufacturing and other industries.
- TD SYNNEX: TD SYNNEX combines IT products, services, and solutions from best-in-class technology vendors and offers those bundles to more than 150,000 customers in over 100 countries. It specializes in tech segments such as the cloud, cybersecurity, big data and analytics, Internet of Things (IoT), and more. TD SYNNEX was formed through the merger of SYNNEX Corp. and Tech Data Corp., which was completed on Sept. 1, 2021. Rich Hume assumed the role of chief executive officer (CEO) of the newly-formed company. Dennis Polk, the former CEO of SYNNEX, became executive chair of the board of directors. Tech Data was previously owned by funds managed by Apollo Global Management Inc. (APO). Apollo received 44 million shares of common stock and $1.1 billion in cash under the terms of the merger agreement. It now owns 45% of TD SYNNEX.
- Intel Corp.: Intel designs and manufactures computer components and related products, including processors, chipsets, server products, memory and storage, Ethernet products, wireless connectivity products, and more. Its products are designed for traditional and emerging computing technologies, including edge computing, 5G networks, cloud computing, AI, autonomous driving, and more. Intel employs a global workforce of around 110,600 people. The company recently announced that it has been awarded a contract with the U.S. Department of Defense (DoD) to provide commercial foundry services for the initial phase of the DoD’s Rapid Assured Microelectronics Prototypes — Commercial (RAMP-C) program. Under the agreement, Intel will develop a U.S.-based commercial semiconductor foundry ecosystem, which will be used to manufacture leading-edge custom and integrated circuits and other commercial products for the DoD. Intel’s foundry business, launched earlier this year, will oversee the work. The company noted in its press release that 80% of leading-edge semiconductor manufacturing capacity is concentrated in Asia. The lack of domestic manufacturing capacity poses risks to longer-term U.S. needs for secure microelectronics, Intel said.
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 (%)|
|Fidelity National Information Services Inc. (FIS)||123.73||76.4||1,730||17.3|
|Advanced Micro Devices Inc. (AMD)||103.88||126.0||346.2||99.3|
|The Trade Desk Inc. (TTD)||72.58||34.7||100.0||100.9|
|NVIDIA Corp. (NVDA)||219.00||547.5||276.0||68.3|
|Qualcomm Inc. (QCOM)||133.60||150.7||139.2||64.7|
- Fidelity National Information Services Inc.: Fidelity National Information Services (FIS) is a global provider of technology solutions for merchants, banks, and firms engaged in capital markets. The company’s technology and services are aimed at finding solutions for the payment, banking, and investment needs of its customers, which number more than 18,000.
- Advanced Micro Devices Inc.: Advanced Micro Devices is a global semiconductor company that provides x86 microprocessors, chipsets, graphics processing units (GPUs), development services, and other high-performance computing, graphics, and visualization technologies. Its products and services are used for gaming, digital platforms, and data centers. The company operates in 35 locations worldwide.
- 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 a range of ad formats, including display, video, audio, native and social, and via various devices, such as computers, mobile devices, and connected TV. The Trade Desk announced in August financial results for Q2 of its 2021 fiscal year (FY), the three-month period ended June 30, 2021. Net income rose 90.0% on revenue growth of 100.9% compared to the year-ago quarter. The company noted that it recently launched its Solimar trading platform, which provides advertisers with a variety of features such as secure onboarding of first-party data and a cross-channel measurement marketplace.
- NVIDIA Corp.: NVIDIA is a maker of GPUs, a type of computer chip originally designed for computer graphics. GPUs, once used primarily for personal computer (PC) gaming, have found new major sources of demand in cryptocurrency mining and machine learning in recent years. That’s because GPUs also excel at these new tasks. The company's products power some of the fastest computing systems in the world. NVIDIA announced in mid-August financial results for Q2 FY 2022, ended Aug. 1, 2021. Net income rose 281.7% YOY as revenue increased 68.3% YOY to a new quarterly record of $6.5 billion. During the quarter the company launched NVIDIA Base Command and Fleet Command, which will enable the development and deployment of AI workloads that run on the company's AI Enterprise software suite.
- Qualcomm Inc.: Qualcomm produces computer chips, software, and services related to wireless networks including 3G, 4G, 5G, and WIFI networks as well as various devices integrated into the IoT. It also licenses wireless technology patents to other companies. In 2020 it had over 300 licensees globally for its 3G, 4G, and 5G technology. As of the end of Q3 FY 2021 it had over 140,000 patents and patent applications around the world. On Aug. 5, 2021, it announced it was acquiring automotive technology firm Veoneer for $37 a share. Qualcomm said the acquisition is meant to help improve its competitiveness in the market for "advanced driver assistance systems" (ADAS) the term for various automated systems that try to reduce human error on the road.
Momentum investing is a factor-based investing strategy that involves investing in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still.
These are the tech stocks that had the highest total return over the last 12 months.
|Tech Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Cloudflare Inc. (NET)||131.41||42.1||264.0|
|Bill.com Holdings Inc. (BILL)||294.20||28.5||249.8|
|Fortinet Inc. (FTNT)||299.49||48.9||159.6|
|HubSpot Inc. (HUBS)||696.68||32.8||157.9|
|Applied Materials Inc. (AMAT)||140.80||127.1||152.0|
|Technology Select Sector SPDR Fund (XLK)||N/A||N/A||37.9|
- Cloudflare Inc.: Cloudflare is a global cloud services provider. Its platform delivers network services that enhance the security and performance of customers’ websites and critical business applications. Roughly 25 million Internet properties utilize Cloudflare’s services, and the company serves about 25 million HTTP requests per second.
- 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 manage their cash inflows and outflows. Bill.com Holdings serves more than 80% of the top 100 U.S. accounting firms. The company announced in early September that it completed its acquisition of Invoice2go, a mobile-first accounts receivable software provider, for approximately $625 million.
- 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 serves more than 500,000 customers around the world.
- HubSpot Inc.: HubSpot provides a cloud-based marketing and sales software platform to help enterprises grow. It offers customer relationship management (CRM), content management software (CMS), marketing and sales, and other management solutions. HubSpot serves more than 121,000 customers in more than 120 countries. The company announced in early August financial results for Q2 FY 2021, ended June 30, 2021. HubSpot’s net loss narrowed to $24.6 million from a net loss of $29.4 million in the year-ago quarter. Revenue rose 52.6% YOY. The company also announced that the appointment of CEO Brian Halligan as executive chairman of the board of directors, effective Sept. 7, 2021. Chief Customer Officer Yamini Rangan was appointed as the new CEO.
- Applied Materials Inc.: Applied Materials is a global provider of materials engineering solutions. It offers manufacturing equipment, services, and software to the semiconductor, display, and other related industries. The company employs approximately 24,000 people in 19 countries across the globe.
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. 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.
YCharts. “Financial Data.” Accessed Sept. 20, 2021.
CDK Global. “About.” Accessed Sept. 20, 2021.
HP. “Form 10-K for the Fiscal Year Ended October 31, 2020,” Page 4. Accessed Sept. 20, 2021.
HP. “Why HP.” Accessed Sept. 20, 2021.
HP. “HP Inc. to Acquire Teradici.” Accessed Sept. 20, 2021.
Arrow Electronics. “Product Categories.” Accessed Sept. 20, 2021.
Arrow Electronics. “Form 10-K for the Fiscal Year Ended December 31, 2020,” Page 4. Accessed Sept. 20, 2021.
Arrow Electronics. “Company Overview.” Accessed Sept. 20, 2021.
TD SYNNEX. "Company Overview." Accessed Sept. 20, 2021.
TD SYNNEX. "SYNNEX and Tech Data Complete Merger to become TD SYNNEX, a Leading Global Distributor and Solutions Aggregator for the IT Ecosystem." Accessed Sept. 20, 2021.
Intel Corp. “Intel Products.” Accessed Sept. 20, 2021.
Intel. “About Intel: Our Product Portfolio.” Accessed Sept. 20, 2021.
Intel. “Form 10-K for the Fiscal Year Ended December 26, 2020,” Page 13. Accessed Sept. 20, 2021.
Intel. “Intel Wins US Government Project to Develop Leading-Edge Foundry Ecosystem.” Accessed Sept. 20, 2021.
FIS. “Investor Overview.” Accessed Sept. 20, 2021.
FIS. “A History of Growth.” Accessed Sept. 20, 2021.
FIS. “About Us.” Accessed Sept. 20, 2021.
Advanced Micro Devices. “Form 10-K for the Fiscal Year Ended December 26, 2020,” Page 1. Accessed Sept. 20, 2021.
Advanced Micro Devices. “Investor Relations.” Accessed Sept. 20, 2021.
Advanced Micro Devices. “About AMD.” Accessed Sept. 20, 2021.
The Trade Desk Inc. "Investor Home." Accessed Sept. 20, 2021.
The Trade Desk Inc. "The Trade Desk Reports Second Quarter Financial Results." Accessed Sept. 20, 2021.
NVIDIA Corp. "About Us." Accessed Sept. 20, 2021.
NVIDIA Corp. "Corporate Overview." Accessed Sept. 20, 2021.
NVIDIA Corp. "NVIDIA Announces Financial Results for Second Quarter Fiscal 2022." Accessed Sept. 20, 2021.
Qualcomm Inc. "About Qualcomm." Accessed Sept. 21, 2021.
Qualcomm Inc. "Qualcomm Offers to Acquire Veoneer for $37 per Share in Cash." Accessed Sept. 21, 2021.
Cloudflare Inc. “Investor Relations: Corporate Overview.” Accessed Sept. 20, 2021.
Cloudflare Inc. “So What Is Cloudflare?” Accessed Sept. 20, 2021.
Bill.com Holdings Inc. "Investor Relations: Corporate Overview." Accessed Sept. 20, 2021.
Bill.com Holdings Inc. "About Us." Accessed Sept. 20, 2021.
Bill.com Holdings Inc. "Bill.com Completes Acquisition of Invoice2go." Accessed Sept. 20, 2021.
Fortinet Inc. “About Us.” Accessed Sept. 20, 2021.
HubSpot. “Our Story.” Accessed Sept. 20, 2021.
HubSpot. “HubSpot Reports Q2 2021 Results.” Accessed Sept. 20, 2021.
Applied Materials Inc. "Form 10-K for the fiscal year ended October 25, 2020," Page 4. Accessed Sept. 20, 2021.
Applied Materials Inc. "About." Accessed Sept. 20, 2021.