Top 3 tech stock have to buy now
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Technology stocks are perennially one of the hottest areas of the stock market. Investors closely follow this sector because of its track record of scorching returns and the potential for more in the future. So it can be worth keeping an eye on tech stocks and tracking the hot performers. Show
While a list of best performers won’t tell you which stocks will do well in the future, many top tech performers continue to deliver strong returns for years. For example, Amazon has put up serious gains in past years, so it can be useful to follow the best tech stocks to see which will continue their high-growth ways. Below are the best-performing tech stocks in 2023, which includes exclusively tech stocks from the Technology Select Sector SPDR Fund ETF (XLK). While 2022 was a challenging one for equities, many tech stocks bounced back strongly in 2023. Best tech stocks as of January 2024Company and ticker symbol Performance in 2023 NVIDIA (NVDA) 238.9% Advanced Micro Devices (AMD) 127.6% Palo Alto Networks (PANW) 111.3% Broadcom (AVGO) 99.6% Salesforce (CRM) 98.5% Fair Isaac Corporation (FICO) 94.5% Arista Networks (ANET) 94.1% Intel (INTC) 90.1% Jabil (JBL) 86.8% Lam Research (LRCX) 86.4% Data as of Dec. 29, 2023 It can also be worthwhile keeping an eye on some of tech’s laggards, too. Why? Sometimes the reason a stock might be underperforming is because it skyrocketed the year before. So investors need time to digest the good news, and the underlying business needs time to catch up to the stock price. So this year’s underperforming stock could well become a darling again next year. Below are the worst-performing tech stocks from the same fund. Worst-performing tech stocks as of January 2024Company and ticker symbol Performance in 2023 Enphase Energy (ENPH) -50.1% EPAM Systems (EPAM) -9.3% Juniper Networks (JNPR) -7.8% Keysight Technologies (KEYS) -7.0% Corning (GLW) -4.7% Data as of Dec. 29, 2023 Widely held tech stocksHere’s how some of the most widely held tech stocks have performed. Company and ticker symbol Performance in 2023 Apple (AAPL) 48.2% Microsoft (MSFT) 56.8% Alphabet (GOOGL) 58.3% Amazon (AMZN) 80.9% Tesla (TSLA) 101.7% Data as of Dec. 29, 2023 Should you invest in the hottest tech stocks?Investing in individual stocks can be tough. You need to understand the business and the industry, and know where they’re heading. With tech stocks, that means you may need to research and understand many complex things. For those who have the time and willingness to invest the energy into doing it, they may be able to get some of these great returns. Is everyone else out of luck? Nope. In fact, any investor can take part in the rising tech industry, even with just a little knowledge. That’s because investors have the ability to buy index funds based on whatever sector of the market they want. These funds track a specific collection of stocks and don’t try to beat the market but instead get the weighted average of their holdings. So if you’re looking for tech stocks, consider mutual funds or exchange-traded funds that focus exclusively on the technology sector. You’ll have a wide assortment of funds, ranging from exclusively tech-focused funds to those with a huge allocation to tech, such as an index fund based on the Nasdaq Composite index, a collection of thousands of stocks trading on the Nasdaq exchange. But a key for whatever you invest in: If you don’t hold onto your stock or fund, you won’t get the returns that it could offer. That’s one reason that passive investing often trumps active trading. Bottom lineTracking the hottest tech stocks is a good way to find out what the market likes, but if you want to go out and invest in some of these names, it’s important that you research the business and understand what you’re actually buying. And you’re under no obligation to buy anything you don’t like. As legendary investor Warren Buffett once said, “The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch.” Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. The Best Tech Stocks of January 2024Apple Inc. (AAPL)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It Apple was founded in Los Altos, Calif., by Steve Jobs and Steve Wozniak in 1976. From humble beginnings in Jobs’ family garage, Apple has grown into the most valuable public company on earth by market capitalization. In fact, it’s one of just a small handful of companies that’s valued in trillions of dollars. That makes it so big it can be difficult to avoid when investing. The company currently represents more than 6% of the S&P 500 by weight, meaning that just about any index fund you invest in will own shares in this tech giant. Microsoft Corporation (MSFT)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It Microsoft was founded in 1975 by Bill Gates and Paul Allen in Albuquerque, N.M. The company revolutionized computing at the birth of the industry by creating some of the first software that made personal computers accessible to regular people. MSFT grew by leaps and bounds in its early days—often in stiff competition with Apple—and it’s continued growing in more recent years, even after the exit of its founders. Alphabet Inc. Class A (GOOGL)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It Perhaps best known as the parent company of Google, Alphabet was created as part of a 2015 restructuring. Google, its crown jewel and also predecessor, was founded in 1998 in Menlo Park, Calif., as a project led by Sergey Brin and Larry Page at Stanford University. In the beginning, Google was a humble search engine, but today it and its parent company have grown to become online advertising and web services behemoths. Alphabet’s other claim to fame is the scary amount of data it collects on users. For users who don’t opt out, Google collects data on everything from who they are and where they go to what they like and what they do online. NVIDIA Corp (NVDA)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It NVIDIA was founded in 1993 to produce graphic cards for the burgeoning personal computer market. Almost 30 years on, the company remains an integrated circuit maker, producing chips that support everything from computers to phones and game consoles. There’s a good chance the device you’re reading this article on right now employs a NVIDIA chip—even if most of the NVIDIA-powered smartphones are obsolete today. Meta Platforms Inc. (META)Market CapDividend Yield10-Year Trailing ReturnMarket CapDividend Yield10-Year Trailing ReturnWhy We Picked It The company formerly known as Facebook is now named Meta Platforms to emphasize its embrace of the so-called metaverse. Facebook was originally founded by Mark Zuckerberg and a small cadre of Harvard classmates in his dorm room in 2004. Before its name change, META had accumulated a market capitalization of over $1 trillion, built on the success of the Facebook social network and wildly popular subsidiaries like Instagram and WhatsApp. The firm is attempting to pivot its business toward the promise of the metaverse and other Web3 technologies—and away from massive controversies surrounding the Facebook social network. Taiwan Semiconductor Manufacturing Company (TSM)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It Taiwan Semiconductor Manufacturing Company could be the biggest tech company you’ve never heard of. Founded in 1987, Taiwan Semi is the world’s largest independent manufacturer of semiconductor chips and makes more than 11,000 products. The company’s shares trade on both New York and Taiwan stock exchanges. Broadcom Inc. (AVGO)Market CapDividend Yield10-Year ReturnMarket CapDividend Yield10-Year ReturnWhy We Picked It Headquartered in San Jose, Cali., Broadcom is one of the oldest and largest semiconductor manufacturers. The company began as a division of Hewlett-Packard in 1961, and was spun off as Agilent Technologies in 1999. The current company is the product of a 2016 merger between Broadcom Corporation and Avago Technologies. Today Broadcom specializes in chips for wireless communications, digital set-top boxes and networking hardware used in data centers and cloud computing. The company’s plans for future growth are focused on artificial intelligence applications, SIP manufacturing and cybersecurity. Tencent Holdings (TCEHY)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It Tencent is a Chinese holding company headquartered in Shenzhen. The company is technically a conglomerate, but it’s best known for owning instant messaging app QQ and social media site WeChat, the world’s third largest social network, with more than 900 million daily active users. Tencent also owns a large stake in North Carolina-based Epic Games—the makers of the wildly popular game Fortnite. Its stock trades on the Hong Kong and Nasdaq exchanges. Oracle Corp. (ORCL)Market CapDividend Yield10-Year ReturnMarket CapDividend Yield10-Year ReturnWhy We Picked It Oracle is a multinational software corporation that specializes in database applications and cloud computing. Founded by Larry Ellison in 1977, today Oracle is among the biggest software developers in the global market. The company’s software and hardware applications have powered the rise of the internet for more than four decades. ASML Holding NV (ASML)Market CapDividend Yield10-Year Avg. Annualized ReturnMarket CapDividend Yield10-Year Avg. Annualized ReturnWhy We Picked It ASML is a Netherlands-based company that designs and manufactures the machinery used by companies that make microchips. The company is a major supplier to two other firms on our list, Taiwan Semiconductor and Samsung. In fact, ASML has a near monopoly on making the photolithography machines employed by the global semiconductor industry, giving it an absolutely indispensable role in the global microprocessor supply chain. *All data is sourced from StockRover, current as of December 7, 2023. Types of Tech StocksEach stock market sector can be broken down into several industries and sub-sectors. The tech sector is generally segmented into the following sub-sectors:
Many tech companies are active in both hardware and software. Alphabet, for example, manufactures devices like phone and home assistants while also offering its Google search engine and a full suite of online productivity tools. Advantages of Investing in Tech StocksGrowth companies boost returns. Buying tech stocks lets investors dial up the risk in their portfolios to increase their returns. While risk certainly cuts both ways, buying fast-growing tech names is a very effective way of boosting returns in a low interest rate environment. Constant innovation. Tech companies live on the cutting edge of innovation. Owning shares lets investors participate in gains from breakthroughs that shape the computing and internet products consumers use everyday. Strong demand from indexing. Tech companies now compose over 20% of the S&P 500 stock market index. With hundreds of billions of dollars pouring into index funds each year, that helps sustain growth for shares of the largest tech companies. Risks of Investing in Tech StocksLow dividends. Most technology companies pay minimal dividends. Tech companies in the S&P 500 average a dividend yield under 2%. Many of these companies forego dividends to reinvest in their future growth. The biggest gains may be over. The biggest tech companies have already experienced explosive growth, and the best time to invest in them may have passed. Investors may be able to achieve higher returns by investing in smaller firms, though that introduces the risk of determining how to pick the biggest winners. Disruption. While companies that innovate can generate big profits, they may also face disruption of their business by new players with a stronger game. Shifting regulatory environment. Regulators can change the landscape for emerging technologies rapidly when things go wrong. Data breaches, revelations about data collection and other headlines spur regulators to pass new laws and regulations that can impede future tech sector growth. How to Buy Tech StocksInvestors who want to buy tech stocks can do so in a brokerage account or an individual retirement account (IRA)—and, in some cases, a 401(k). If you’re just beginning your investing journey or looking for a new way to trade, check out our list of the best online brokers and the best investment apps. Investing in individual stocks isn’t like buying an index fund. When buying individual stocks, it’s critical for investors to research companies and assess their financial circumstances before investing. Individual stocks can be very risky, and you need to be aware of the risks before you buy. Read More: How To Buy Stocks Instead of buying individual stocks, many financial advisors recommend that investors diversify, using investments such as an exchange-traded fund (ETF) or index fund. If you want to go this route, you can check out Forbes Advisor’s list of best total stock market index funds or use fund screening tools available on your investing platform to find the best options for you. The author owned shares of Apple Inc. when this article was published. He held no positions in the other securities discussed in the post at the original time of publication. Next Up in InvestingInformation provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners. What are the top three stocks to buy now?Best stocks to buy. What are the top three tech stocks?Tesla (TSLA), Nvidia (NVDA), and Apple (AAPL) — three of the Magnificent Seven tech stocks — have seen huge gains in 2023, riding the waves of various technology and AI trends. But the tech trade is not the only industry that has benefitted this past year. What are the top 3 most active stocks today?Most Actives. What are good stocks to invest in 2023?100 Best Stocks 2023: Nvidia, Meta Make The List. |
