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 35.9% over the past 12 months, above the Russell 1000’s total return of 27.2%. These market performance numbers and statistics in the tables below are as of Dec. 23, 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)||41.06||4.9||4.8|
|Hewlett Packard Enterprise Co. (HPE)||15.76||20.4||6.2|
|Dell Technologies Inc. (DELL)||55.88||42.7||6.5|
|HP Inc. (HPQ)||37.65||40.8||6.9|
|Intel Corp. (INTC)||51.31||208.7||10.0|
- 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.
- Hewlett Packard Enterprise Co.: Hewlett Packard Enterprise offers intelligent technology solutions such as cloud services, compute, and high performance computing & AI. The company’s edge networking connects 10 million devices globally. Its Q4 FY 2021 ended Oct. 31, 2021. For that period, the company reported a 16-fold increase in net earnings and a 2.9% increase in net revenue year-over-year (YOY). Hewlett Packard attributed the performance in part to strong customer demand.
- Dell Technologies Inc.: Dell Technologies designs, develops, and manufactures a range of integrated technology solutions, products, and services. Its products include desktops, workstations, notebooks, displays, projectors, and more. The company also offers multi-cloud, big data, and storage solutions to meet a wide variety of its customers’ needs. Dell serves 98% of Fortune 500 companies and employs a sales force of more than 40,000 people. Dell’s Q3 FY 2022 ended Oct. 29, 2021. Net income more than quadrupled while total net revenue grew by 20.9% YOY, marking the company’s strongest-ever Q3 period. Dell said that robust demand, durable competitive advantages, and strong execution drove these results.
- 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.
- 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. On Dec. 29, 2021, Intel reported the first closing of the sale of its NAND and SSD business and related manufacturing facility in China. The final closing is expected to occur in March. The buyer is South Korea-based SK hynix (000660), which will pay $7 billion in total consideration.
These are the top tech stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in a company’s success. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest Growing Tech Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Sunrun Inc. (RUN)||34.65||7.2||-60.7||109.2|
|Enphase Energy Inc. (ENPH)||188.17||25.4||-46.4||96.9|
|Gartner Inc. (IT)||325.53||26.8||826.3||16.3|
|Fidelity National Information Services Inc. (FIS)||109.05||66.4||766.7||9.7|
|Teledyne Technologies Inc. (TDY)||428.73||20.0||13.3||75.2|
- Sunrun Inc.: Sunrun is a solar energy company that provides residential solar panels and battery storage solutions. The company designs, develops, and installs solar energy systems primarily for residential customers. It also provides maintenance services for those systems. Sunrun has 8,500 full-time employees as of the end of 2020. For Q3 2021 ended Sept. 30, 2021, Sunrun reported that net income attributable to common stockholders fell to $24.1 million even as total revenue rose 109% YOY. Net income was affected negatively by higher total operating expenses.
- Enphase Energy Inc.: Enphase Energy is a global energy technology company that brings solar, batteries, and software together in one complete package. It supplies microinverter-based, solar-plus-storage systems. The company has installed more than 39 million microinverters on more than 1.7 million homes worldwide. On Dec. 13, 2021, Enphase announced the launch of the Enphase Installer Network (EIN) in Mexico. EIN is a network of trusted installers designed to help local installers grow their business supported by a range if digital tools. The company says Mexico is key to its international growth strategy.
- Gartner Inc.: Gartner is a global research and consulting company that helps businesses achieve mission-critical tasks to grow their operations. It helps customers in areas such as finance, information technology, legal and compliance, product management, strategy, and supply chain. Gartner’s employs roughly 16,000 and serves customers in over 100 countries.
- Fidelity National Information Services Inc.: Fidelity National Information Services (FIS) provides financial technology solutions for merchants, banks, and firms engaged in capital markets. Its technology and services provide solutions for payment, banking, and investment needs facilitate $75 billion of transactions for more than 20,000 clients around the planet.
- Teledyne Technologies Inc.: Teledyne Technologies provides enabling technologies for industrial growth markets that require advanced technology and reliability. The company offers digital imaging sensors, cameras, monitoring and control instrumentation, defense electronics and satellite communication subsystems, and related products. Teledyne has operations in the U.S., the U.K., Canada, and Western and Northern Europe. For Q3 2021, Teledyne reported a 42.8% YOY increase in net income on 75.2% YOY growth in net sales. Net sales performance reflects incremental net sales from the acquisition of FLIR Systems Inc. during that quarter.
Momentum investing is a factor-based investing strategy that involves investing in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the tech stocks that had the highest total return over the last 12 months.
|Tech Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Fortinet Inc. (FTNT)||349.02||57.1||132.3|
|NVIDIA Corp. (NVDA)||296.40||741.0||128.0|
|ON Semiconductor Corp. (ON)||66.76||28.8||109.9|
|Gartner Inc. (IT)||325.53||26.8||107.3|
|Arista Networks Inc. (ANET)||141.85||43.6||98.1|
|Russell 1000 Index||N/A||N/A||27.2|
|Technology Select Sector SPDR Fund (XLK)||N/A||N/A||35.9|
- 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.
- 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 been increasingly used for cryptocurrency mining and machine learning in recent years. NVIDIA’s products are also used in other markets, including gaming, professional visualization, data center, and automotive.
- ON Semiconductor Corp.: ON Semiconductor is a technology company focused on automotive and industrial end-markets. The company offers intelligent power and sensing technologies and products related to vehicle electrification and safety, sustainable energy grids, and cloud infrastructure. ON Semiconductor employs roughly 33,000 in 19 countries. For Q3 2021, the company reported 92.8% and 32.2% YOY growth in net income attributable to the company and revenue, respectively. Continued strong demand for ON’s intelligent power and sensing solutions in the automotive and industrial end-markets drove growth.
- Gartner Inc.: See company description above.
- Arista Networks Inc.: Arista Networks offers cognitive cloud networking platforms and services for large-scale datacenter and campus environments. The company has shipped more than 50 million cloud networking ports worldwide. On Nov. 19, 2021, Arista completed a previously announced 4-for-1 stock split. Each Arista stockholder of record as of Nov. 11, 2021 received an additional three shares for each share held on the record date. Trading began on a split-adjusted basis on Nov. 18, 2021.
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 Jan. 2, 2022.
CDK Global. “About.” Accessed Jan. 2, 2022.
Hewlett Packard Enterprise Co. “Why HPE.” Accessed Jan. 2, 2022.
Hewlett Packard Enterprise Co. “HPE Reports Fiscal 2021 Fourth Quarter and Full-Year Results.” Accessed Jan. 2, 2022.
Dell Technologies Inc. “Form 10-K for the fiscal year ended January 29, 2021,” Page 6. Accessed Jan. 2, 2022.
Dell Technologies. “Investor Relations.” Accessed Jan. 2, 2022.
Dell Technologies Inc. “Dell Technologies Delivers Record Third Quarter Fiscal 2022 Results.” Accessed Jan. 2, 2022.
HP Inc. “Form 10-K for the fiscal year ended October 31, 2020,” Page 4. Accessed Jan. 2, 2022.
HP Inc. “HP: Who We Are.” Accessed Jan. 2, 2022.
Intel Corp. “Intel Products.” Accessed Jan. 2, 2022.
Intel Corp. “About Intel.” Accessed Jan. 2, 2022.
Intel Corp. “Form 10-K for the fiscal year ended December 26, 2020,” Page 13. Accessed Jan. 2, 2022.
Intel Corp. “Intel Sells SSD Business and Dalian Facility to SK hynix.” Accessed Jan. 2, 2022.
Sunrun Inc. “Form 10-K for the fiscal year ended December 31, 2020,” Page 5. Accessed Jan. 2, 2022.
Sunrun Inc. “Form 10-K for the fiscal year ended December 31, 2020,” Page 11. Accessed Jan. 2, 2022.
Sunrun Inc. “Sunrun Reports Third Quarter 2021 Financial Results.” Accessed Jan. 2, 2022.
Enphase Energy Inc. “About Us.” Accessed Jan. 2, 2022.
Enphase Energy. “Enphase Energy Launches Enphase Installer Network in Mexico.” Accessed Jan. 2, 2022.
Gartner Inc. “Corporate Fact Sheet: Gartner at a glance,” Page 1. Accessed Jan. 2, 2022.
Gartner Inc. “Investor Relations.” Accessed Jan. 2, 2022.
FIS. “Investor Overview.” Accessed Jan. 2, 2022.
FIS. “A History of Growth.” Accessed Jan. 2, 2022.
FIS. “About Us.” Accessed Jan. 2, 2022.
Teledyne Technologies Inc. “About Us.” Accessed Jan. 2, 2022.
Teledyne Technologies Inc. “Teledyne Technologies Reports Third Quarter Results.” Accessed Jan. 2, 2022.
Fortinet Inc. “About Us.” Accessed Jan. 2, 2022.
NVIDIA Corp. “About Us.” Accessed Jan. 2, 2022.
NVIDIA Corp. “Investors.” Accessed Jan. 2, 2022.
ON Semiconductor Corp. “About onsemi.” Accessed Jan. 2, 2022.
ON Semiconductor Corp. “onsemi Reports Record Revenue and Non-GAAP Earnings Per Share for Third Quarter 2021.” Accessed Jan. 2, 2022.
Arista Networks Inc. “About Arista.” Accessed Jan. 2, 2022.
Arista Networks Inc. “Arista Networks Completes Four-for-One Stock Split.” Accessed Jan. 2, 2022.