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Tech has been all the rage in the investment world since the 90s when the dot-com bubble started to pump air into the industry’s balloon. Five-digit percent returns from stocks in the sector have made tech stocks one of the best investments of our lifetime.
But are we still in time to ride the tech wave? Are there any stocks still worth investing in?
Let’s explore some of the best stock picks in the tech sector and find out.
What Are Tech Stocks?
Tech stocks are shares of companies that—you guessed it—deal within the technology sector. These companies specialize in manufacturing hardware, developing software, and offering services related to technology.
Some of the most popular themes in tech include Ai, eCommerce, semiconductors, computer hardware, cloud computing, SaaS, software, data centers, consumer electronics, IT services, cybersecurity, and more.
Stocks in the tech sector are often associated with rapid growth, technological advances, and a drive for innovation and change.
Are Tech Stocks a Good Investment?
Tech stocks have been one of the best-performing sectors in recent memory, outpacing other investments in terms of growth and profitability.
But are tech stocks still worth the squeeze?
The sector could still offer a compelling return considering the disruptive potential that emerging technologies have in the economy.
One of the most fundamental reasons behind the success of technology stocks is the sector’s ability to reduce costs and improve revenue.
Tech companies have an exceptional ability to create new markets and disrupt existing ones, which can translate into significant growth opportunities for investors.
Looking forward there is still a great deal of innovation ahead and what could be some of the most disruptive technology we’ve ever seen. The impact of Ai, DNA sequencing, nanotechnology, and clean technology could help drive the sector upward over the next expansion cycle.
A study carried out by PwC found that Ai could contribute up to $15.7 trillion to the global economy by 2030. This would boost GDP for local economies by more than 26%.
If their projections are accurate, Ai stocks and the tech sector could be poised to grow exponentially and deliver massive returns for investors.
But the attractive growth expectations don’t end with Ai. In fact, other analysts have forecast that the global technology market could grow at an accelerated CAGR of up to 25.73% through 2027.
But as with all investments, there are risks involved. High rewards are always accompanied by high risk, and buying stocks in the tech sector is no exception.
For one thing, tech companies in their early stages tend to have negative net income. This means most of them are actually losing money on their way to the top since their business models operate at scale.
Take companies like Uber for example. Despite its success and disruption potential, the company has been unable to turn a profit on a net basis.
Disrupting technology can also pose a risk of being disrupted by a novel innovation—ironic right?
How many of you remember Altavista or MySpace? These were both leading companies that were eventually replaced by new and more innovative competitors.
However, for investors who can stomach some risk in pursuit of potential returns, the tech sector could offer compelling opportunities to make money in the stock market.
How to Pick the Best Tech Stocks?
If your appetite for risk calls for tech stocks, but you’re not sure where to start, then you’re not alone. Tech and innovation can be intimidating as there are a lot of unknowns involved in novel and disruptive innovation.
But there are a few signs to look for that might give clues as to how to pick a winning tech stock.
In the case of tech stocks, sound financials might not be the thing to look for as most disruptors might be at a net loss. Instead, investors will want to look at other financial and performance metrics to help them assess their investment.
While each tech sector is different, a large user base, consumer interest, and generous funding are possible indicators of success.
Take Uber again as an example. The company operates at a net loss but it has enough investor funding that it’s able to continue operating without fear of running out of capital. The ride-sharing app also has a large user base and an operation that’s widespread across multiple locations.
The size of the business or industry that the novel technology is seeking to disrupt is also a significant indicator of its potential upside.
Take Ai for example. The novel technology could disrupt numerous sectors of the economy which is why PwC’s report has such high expectations for the industry.
Ready to disrupt your portfolio with tech stocks? If so, then you’re in luck as we’ve done the research and compiled a list of the best stocks this sector has to offer.
This is a list of what we believe are the best tech stocks on the market right now.
Best Tech Stocks
Cisco Systems (NASDAQ: CSCO)
Link up your portfolio to the tech world with this connectivity stock. Cisco is a digital communications technology conglomerate that develops and manufactures networking hardware, software, and other high-technology services and products. The company is trusted for our national security due to its rock-solid reputation, innovation, and reliability.
Motorola (NYSE: MSI)
We might be a long way away from the days when the Motorola Razr first flipped our lives upside down. But the telecommunications giant remains as relevant and influential as ever, solidifying its role as an industry leader. MSI succeeds its predecessor, Motorola Inc., as a software, video, and telecommunications equipment, systems, and service provider.
Arista Networks (NYSE: ANET)
This cutting-edge computer networking company is all about providing high-performance networking solutions. Arista designs and sells network switches, high-performance computing, high-frequency trading systems, and cloud technology. The company is well positioned to capitalize on the ever-growing need for big data as its products are highly sought after by data centers.
Dell Technologies (NYSE: DELL)
Dell is one of the leading players in the manufacture and sales of computer systems that include personal computers, data servers, software, and much more. This dynamic tech company has been gaining a great share of the American computer market since the 80s and its known for becoming the first major manufacturer to offer Linux across its full product line.
NetApp (NASDAQ: NTAP)
For the past three decades NetApp has positioned itself as a cutting-edge innovator in the technology sector and a leading provider of cloud services and data management solutions. Organizations all over leverage NetApp services to unlock the full potential of their data. NetApp’s customer-centric approach is the key differentiator that sets it apart from its competition.
Corning Incorporated (NYSE: GLW)
How do glass and ceramics fit into the tech industry one might ask? You are looking at it right now. Whether you are reading this on a computer or a mobile device, it’s likely that it was developed using specialized glass and ceramics. Corning is a world leader in specialty glass solutions for various industries with a history of innovation spanning over 165 years.
Autodesk (NASDAQ: ADSK)
Autodesk is home to AutoCAD, one of the world’s leading 3D design software. Everything from the computer you are using to the car you drive was probably first modeled in a 3D environment, and chances are they were developed using AutoCAD. Autodesk is also a global leader in the development of engineering and entertainment software. Its innovative solutions help businesses and individuals bring their ideas to life.
DocuSign (NASDAQ: DOCU)
Throw away that printer and enter the digital world with DocuSign. This SaaS company is the leading provider of digital signature solutions. Its cloud-based platform enables businesses to manage and sign documents digitally, eliminating the need for paper-based processes. As a result of their FedRAMP and DoD authorization, their service can also be used on a federal level as well. Win-win!
Salesforce Inc (NYSE: CRM)
CRM is on a mission to supercharge sales teams all over the world with its powerful SaaS Customer Relationship Management platform. Its innovative and intuitive platform allows organizations to manage their customer iteration and sales processes effectively. The cloud-based software is used by over 150,000 customers making it the #1 CRM platform in the world.
Wix.Com (NASDAQ: WIX)
No coding? No problem. Wix’s user-friendly website-building platform leverages intuitive and powerful features to let its users build professional-looking websites without the need to code. The company is disrupting the website development space and democratizing the internet for everyone who wants to have their own online real estate.
Microsoft (NASDAQ: MSFT)
No list of great tech stocks is complete without a mention of Microsoft. This revolutionary company transformed the business world with the introduction of products like Windows, which is estimated to be used by over 1.4 billion people. Its latest venture into the Chat-GTP language processing system could propel MSFT into the future of Ai, opening the door to trillions of dollars in potential value.
Shopify (NYSE: SHOP)
This stock gives brick-and-mortar retail the chills as it emerges as the go-to platform for entrepreneurs who want to set up an online business. Much like Wix, SHOP helps democratize the internet by offering equal opportunities to those wanting to dip their toes into the world of e-commerce.
Zoom (NASDAQ: ZM)
The COVID pandemic changed the way we work and Zoom was the key that allowed the world to work from the comfort of their home. With its intuitive interface and reliable technology, Zoom is the perfect tool for connecting with colleagues, clients, and loved ones from anywhere in the world. The company sets itself apart from competitors by offering unmatched streaming stability at scale.
Zillow (NASDAQ: ZG)
If you own a home, then you know how obsessed one can get with periodically checking your home price on Zillow. Or how much does the neighbor pay for that fancy 3-bedroom penthouse? That’s because Zillow hit a home run with its online real estate platform which has made buying and selling homes more accessible than ever before. If you want to add a bit of property value to your portfolio, then this might be your stock.
Spotify (NYSE: SPOT)
Spotify hit all the right notes with their music streaming service. The Swedish-based platform disrupted the way we consume music and the music industry as a whole. While new and powerful competitors have entered the field, Spotify remains the uncontested leader in the music streaming space. Looking forward, the company is looking to keep breaking ground in the podcasting business, opening up space for even more potential growth in the years to come.
GoDaddy Inc (NYSE: GDDY)
GoDaddy is the ultimate wingman for businesses and entrepreneurs who want to make their mark online. The internet domain registrar and web hosting service provider has a whopping 21 million customers—that’s nearly 6% of the US population. Its comprehensive suite of tools and services makes it easy to create a stunning website and reach new customers.
Akamai Technologies, Inc. (NASDAQ: AKAM)
Akamain is the ninja of the internet. You might not know this, but this security company is quietly and efficiently protecting your online life. Its connected cloud platform makes it easy for businesses to develop and run applications and provide secure online experiences. When it comes to cybersecurity, this is one stock to keep an eye on.
Cloudflare (NYSE: NET)
This stock could help keep your portfolio safe. Cloudflare safeguards the internet by protecting websites and apps from cyberattacks. Their DDoS mitigation and cloud cybersecurity services have become essential in a world where cyber threats are continuously evolving.
Oracle (NYSE: ORCL)
With more than 430,000 customers in 175 countries, this company leads the way in enterprise software, providing everything from database management to cloud services. Its focus on customer satisfaction is backed by more than 20,000 implementation consultants and 15,000 customer support specialists. The Texas-based software company is among the top three in the world by revenue and market capitalization.
Baidu (NASDAQ: BIDU):
Dubbed the Chinese Google, this technology giant is China’s top search engine and a pioneer in artificial intelligence. Millions of users rely on Baidu for their online search experience as it stands as the 5th most consulted website in the world. The popular search engine represents more than 70% of the total Chinese market share.
Meta (NASDAQ: META)
From social media to the Metaverse, this company has had quite a journey. META is the market leader in online social experiences operating on platforms like Instagram, Facebook, and WhatsApp. Close to 3 billion people around the globe use Facebook, representing more than one-third of the total global population.
Alphabet Inc (NASDAQ: GOOGL)
Google is considered to be the gate to the internet and a leader in artificial intelligence. Its popular search engine has served as the internet’s primary point of access for billions of people around the globe. The search engine ranks as the most visited website in the U.S. followed by its subsidiary YouTube. Want to know more? Then you might want to Google it.
Pinterest (NYSE: PIN)
You might want to pin your hopes on this one. Pinterest is a visual discovery platform that’s taken the world by storm. The platform is helping 400+ million users revolutionize the way the world shares ideas and inspiration. Looking to create a vision board for your perfect stock portfolio? Then you might want to head to Pinterest to get it done.
Snap Inc (NYSE: SNAP)
Snap has become a staple among the younger generation for its video capabilities and entertaining video filters. This social media giant might not be at the head of the race when it comes to a fan base. But its 375 million daily users make this a sound business with the potential of offering attractive long-term returns.
Accenture (NYSE: ACN)
Americans might not be as familiar with this company as Europeans, but it is definitely one to pay attention to. Accenture is a provider of IT consulting services with a global presence. The multinational is the largest employer in the world and works across almost all industries within the technology sector.
Fidelity National Information Services Inc (NYSE: FIS)
Is a global fintech leader and provider of technology solutions for the financial sector. Its portfolio of products spans various segments that include Merchant Solutions, Banking Solutions, and Capital Market Solutions while serving both the banking and retail sectors. This financial industry tech guru is worth keeping an eye on.
IBM (NYSE: IBM)
IBM has been a pioneer and leader in the world of technology since its formation in 1911. We’ve seen many tech companies come and go during that period, but IBM has stood the test of time. The tech giant continues with its tradition of innovation to this day by making significant breakthroughs in the fields of artificial intelligence and quantum computing.
