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May 2, 2024 · Learn about the largest and fastest-growing technology companies in the stock market, their sub-sectors, advantages and risks. Find out how to buy tech stocks and compare them with other investment options.
A curated list of 18 tech stocks that matter, including FANG, IPOs and rising stars. See their performance, market cap, volume and latest news on Yahoo Finance.
- Overview
- Best Value Tech Stocks
- Fastest-Growing Tech Stocks
- Tech Stocks With the Most Momentum
- Advantages of Tech Stocks
- Disadvantages of Tech Stocks
- The Bottom Line
Tech stocks have had a strong start to 2024, buoyed by factors including optimism that the Federal Reserve will lower rates this year and better-than-expected quarterly reports from several of the
With AI adoption accelerating, many tech companies are poised to expand into new markets and attract fresh customers. It's no wonder, then, that investors will watch this sector closely in the hopes that last year's rally will continue. A helpful benchmark for tech firms more broadly is the Technology Select Sector SPDR Fund (
), an exchange-traded fund (ETF), which has risen by 51.7% in the last year compared with 20.8% for the
Below is an analysis of the top
is an investing strategy that holds that investors can identify stocks that are trading below their true value. At the time the market corrects this mispricing, these undervalued names may increase in value. Investors typically attempt to identify undervalued stocks using fundamental metrics like the price-to-earnings (P/E) ratio. Typically, a lower P/E ratio signals an undervalued stock because the company is valued less than its fundamental value. These stocks may offer a stronger return after the market adjusts.
A Chinese fintech company, it operates a financial marketplace to connect borrowers with investors. Yiren Digital provides loan services, payment processing, and insurance products.
investors believe that increases in a company's revenue and earnings per share (EPS) can be an indicator of a strong business that has potential to increase in value. However, focusing on just one or the other of these two metrics can give an incomplete picture of a company's growth potential. Circumstances unrelated to a company's fundamental business strength—such as tax law changes, mergers, or one-off gains—can skew these figures on their own.
Investopedia uses a dual-metric approach to reach a more balanced assessment of growth companies. We equally weight the latest year-over-year (YOY) percentage growth for both EPS and revenue. This approach aims to reduce the impact of those one-time anomalies to provide a better view of a company's true growth pattern and potential. Additionally, any companies with quarterly growth in excess of 1,000% are excluded as outliers.
investing is a strategy aiming to capitalize on pre-existing market trends by focusing on stocks that have outpaced their peers or the broader market on returns. This investment principal holds that stocks on an upward path are likely to continue to outperform so long as fundamental aspects of the business, industry, or sector do not change.
Momentum investing is a common strategy applied to tech stocks because they regularly experience significant market disruptions. As companies launch new products, announce technological breakthroughs, and gain rapid popularity, investors have the potential to climb on board while these stocks are still ascending.
Here are the tech stocks with the highest total return in the last 12 months. We've excluded stocks with a share price of under a dollar.
A China-based tech firm operating an online real estate portal. Fang provides marketing, listing, leads generation and financial services for real estate and home improvement markets in China.
Tech stocks, particularly those in emerging areas, are known for experiencing some of the sharpest growth of any publicly traded company. Anticipating this, investors have sought periods in which the sector underperforms to invest heavily, as they expect significant growth over the long term.
But growth among tech stocks can vary dramatically. Many of the larger firms have limited growth potential because their market saturation and capitalization are already very high. Small-cap or penny tech stocks that experience technological breakthroughs or suddenly become incredibly popular may have periods of massive growth. Unusually, some of the biggest names in tech—including Amazon.com Inc. (
), Meta Platforms Inc. (
), and Alphabet Inc. (
)—have continued to grow at significant rates.
Tech trends are always changing, with companies aiming to capitalize on the latest technology and to guide and follow developments in innovation. This makes the sector primed for breakthroughs. One of the most recent major trends to sweep the
Fluctuations in the tech sector
While it can be tempting to imagine that the tech sector only moves upward, this is not the reality. For example, 2022 was generally viewed as a very poor year for the sector. Even the largest firms faced significant downturns. Alphabet dropped by 39% in that year, for instance.
One reason for the sector's occasional stumbles is often related to the supply chain. When there are disruptions to the supply of materials and equipment necessary to make the highly specialized components used by tech companies, this can throw off an entire industry. A multi-year shortage of semiconductor components recently disrupted a range of industries, for example.
The sharp gains of many tech firms can prove tempting to investors who may not be well-versed in the technologies themselves. With rapid innovation characterizing the sector, trends and prospects shift very quickly as well. Investors who are unprepared for this pace or who lack knowledge of the fundamental strengths of different tech companies may find themselves following a trend that has already changed.
The tech industry's rapid gains in 2023 appear poised to continue into 2024. Yiren Digital, GRAVITY, and Fang Holdings top the list of tech stocks for best value, fastest growth, and most momentum for February 2024, respectively. But while tech stocks have historically witnessed rapid growth at the cutting edge of technological development, investors should still watch out for risks including sector-wide turbulence and the quick pace of trends rising and falling.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our
As of the date this article was written, the author does not own any of the above securities.
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6 days ago · Find out which tech stocks are undervalued and offer attractive prices in a predominantly overvalued sector. See the list of seven stocks with Morningstar Economic Moat Ratings and fair value estimates as of March 18, 2024.
1 day ago · Find out which tech stocks are rising or falling today, and get related industry news and analysis. Compare prices, volumes, changes and percentages of the biggest large- and mid-cap tech companies.
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May 1, 2024 · Find out which tech stocks have the highest returns in the Nasdaq 100 index based on one-year performance. Learn what tech stocks are, how to buy them and which categories they belong to.
Yahoo Finance's Technology performance dashboard help you quickly analyze & examine stock performance across the Technology sector using dozens of metrics and views.
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