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 32.9%, above the Russell 1000’s total return of 18.1% over the past 12 months, as of January 18, 2021. All statistics in the tables below are as of January 18.
Here are the top 3 tech stocks with the best value, the fastest growth, and the most momentum.
Best Value Tech Stocks
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|
|NortonLifeLock Inc. (NLOK)||20.45||12.1||4.0|
|Xerox Holdings Corp. (XRX)||22.49||4.5||5.5|
|Synnex Corp. (SNX)||87.52||4.5||8.6|
|NCR Corp. (NCR)||33.91||4.4||10.6|
|Intel Corp. (INTC)||57.58||236.0||11.3|
- NortonLifeLock Inc.: NortonLifeLock is a software technology company that offers cybersecurity to approximately 50 million consumers. The company offers solutions aimed at helping its customers secure their devices, identities, online privacy, and other digital security needs. The company announced in early December that it was acquiring Avira from Investcorp Technology Partners for about $360 million. Avira provides cybersecurity and privacy solutions to customers in Europe and key emerging markets.
- 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’s geographical footprint spans 160 countries and it currently holds more than 18,000 active patents for innovation. The company announced in December the appointment of Xavier Heiss to the role of chief financial officer (CFO), a role he has filled on an interim basis since the end of September. Mr. Heiss has been with Xerox for 32 years and most recently served as executive vice president and president of the company’s EMEA Operations.
- Synnex Corp.: Synnex is a provider of IT supply chain services. It offers a range of distribution, logistics, and integration services to the technology industry. Its core competencies include IT systems and servers, system components, software, communication and security equipment, and consumer electronics. 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.
- NCR Corp.: NCR manufactures machines and devices used in the banking, healthcare, and retail industries. It also provides related software and services. Its products include automated teller machines (ATMs), self-checkout and self-service kiosks, point-of-sale workstations, and scanners. The company employs more than 34,000 people in 160 countries. NCR recently confirmed that it has offered to acquire all of the outstanding shares of Cardtronics PLC (CATM) for $39.00 per share in cash. Cardtronics provides automated consumer financial services through ATMs and multi-function financial services kiosks.
- Intel Corp.: Intel designs and manufactures computer components and related products, including microprocessors, chipsets, embedded processors and microcontrollers, flash memory, graphic, network and communication, and storage products. Intel employs a global workforce of around 110,800 people and expects its total addressable market to be approximately $300 billion by 2024. The company recently announced the appointment of Pat Gelsinger as chief executive officer (CEO), effective February 15, 2021. He will succeed Bob Swan.
Fastest Growing Tech Stocks
Growth investing is a factor-based investing strategy in which you invest in businesses that you believe will grow significantly faster than the market as a whole. There are different growth metrics, but one of the most widely used is growth in profits, as measured by earnings per share (EPS). Growth investors believe that if a company consistently grows profits faster than the market as a whole, its stock price will rise as investors seek to get a share of future profits. These are the stocks with the highest year-over-year (YOY) EPS growth for the most recent quarter.
|Fastest Growing Tech Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Coherent Inc. (COHR)||151.95||3.7||966.7|
|Qualcomm Inc. (QCOM)||157.09||177.7||514.3|
|Jabil Inc. (JBL)||44.60||6.7||403.8|
|PTC Inc. (PTC)||124.12||14.5||400.0|
|First Solar Inc. (FSLR)||96.58||10.2||400.0|
- Coherent Inc.: Coherent manufactures laser-based photonics products, which are used in manufacturing and instrumentation applications such as optical telecommunication, semiconductor manufacturing, and advance packaging. The company employs approximately 4,875 people in more than 19 countries. Coherent recently announced that it will be acquired by Lumentum Holdings Inc. (LITE) in a cash and stock transaction worth $5.7 billion. Lumentum provides optical and photonic products. The transaction is expected to close in the second half of 2021.
- Qualcomm Inc.: Qualcomm is a multinational semiconductor and telecommunications equipment company. It develops digital wireless communications products and services, AI technology, and is engaged in the expansion of 5G technology. The company employs approximately 41,000 people in 32 different countries around the world. Qualcomm recently announced that it has agreed to acquire NUVIA Inc. for about $1.4 billion. NUVIA develops high-performance, power-efficient, and scalable processing technology.
- Jabil Inc.: Jabil is a manufacturing services company that offers digital prototyping, printed electronics, device integration, circuit designing, and more. The company serves a variety of industries, including appliances, automotive electronics manufacturing, computing and storage, defense and aerospace, energy, healthcare, printing, and many others. Jabil employs 260,000 people in 30 countries across the world.
- PTC Inc.: PTC develops a range of software tools and solutions for a variety of applications, including augmented reality, industrial internet of things (IoT), computer-aided design (CAD), and product lifecycle management (PLM). The company employs 6,243 people globally. PTC recently announced that it has completed its transaction of Arena Solutions Inc., a leading software as a service (SaaS) PLM company. The acquisition, valued at $715 million, was announced in mid-December 2020.
- First Solar Inc.: First Solar designs and manufactures solar power systems and solar modules. The company utilizes a thin film semiconductor technology to manufacture electricity-producing solar modules. First Solar has shipped more than 20GW of solar modules worldwide and employs approximately 6,400 employees globally.
Tech Stocks with the Most Momentum
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the last 12 months.
|Tech Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Enphase Energy Inc. (ENPH)||190.59||24.1||531.9|
|Cloudflare Inc. (NET)||77.85||23.9||313.0|
|Fastly Inc. (FSLY)||88.21||10.0||287.6|
|CrowdStrike Holdings Inc. (CRWD)||219.51||48.6||264.3|
|Zscaler Inc. (ZS)||211.06||28.3||251.8|
|Technology Select Sector SPDR ETF (XLK)||N/A||N/A||32.9|
- Enphase Energy Inc.: Enphase Energy is a renewable energy company that provides energy management solutions. It designs and manufactures solar panels, energy storage, and other products. The company employs more than 700 people worldwide and operates in 21 countries.
- Cloudflare Inc.: Cloudflare is primarily an Internet security company. It provides a global cloud platform that offers a range of network services, including reliability, advanced security, video streaming and delivery, and domain registration. The company handles 20 million HTTP requests per second on average and serves data from 200 cities in more than 100 countries worldwide.
- Fastly Inc.: Fastly is a provider of cloud-computing services. Its edge cloud platform enables developers to run, secure, and deliver websites and applications. The company also offers content delivery and image optimization, cloud security, and streaming solutions. Fastly’s platform handles hundreds of billions of internet requests each day.
- CrowdStrike Holdings Inc.: CrowdStrike provides a cybersecurity platform to protect enterprises and prevent endpoint cyberattacks. Its security solutions are used by major global companies, including banks, healthcare providers, and energy companies. The company serves more than 5,000 customers worldwide.
- Zscaler Inc.: Zscaler is a global security software company offering a cloud-based platform that provides web and mobile security, threat protection, cloud application visibility, and networking solutions. The company operates over 150 data centers worldwide and processes up to 140 billion transactions per day during peak periods. In December, Zscaler reported financial results for Q1 of its 2021 fiscal year (FY), ended October 31, 2020. The company reported a net loss of $55.0 million compared to a net loss of $17.1 million in the year-ago quarter. Revenue rose 52.3% compared to the same quarter a year ago. Cost of revenue and operating expenses increased at a faster pace than revenue, amplifying the company’s net loss.
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