The tech sector has never been more popular than it is now. The advent of the internet and social media created new and profitable business models. This dynamic led to a new age of wealth not seen since the Rockefeller/Carnegie era. Long gone are the days of high flying tech stocks without sales. Current best tech stocks have real products and cash flow. They are competitive backgrounds on which the best minds in the industry compete. However, this does not imply that returns are muted. The best tech stocks to buy now show the highest returns in the market today.
Best Performing Tech Stocks
Buying strength in the tech sector has historically been a profitable strategy. It shows demand for a companies product, and strength begets strength in this scenario. Best tech stocks have similar characteristics. They have higher relative valuations, showing that investors are not worried about paying a premium. This self-fulfilling prophecy creates trends that can last for extended periods of time.
Electronic Arts Inc. (NASDAQ : EA) develops, markets, publishes, and distributes games, content, and services for game consoles, personal computers, mobile phones, and tablets worldwide. This best tech stock shows over 40% returns this past year. The stock trades over 4 million shares each session. This relative strength combined with liquidity is a recipe for large returns.
Additionally, this name shows 98% institutional ownership. Traders find value in this assuming that institutions will support the name if it declined. Also, they may need to chase the name higher if they do not get their full position. This best tech stock to buy now grew earnings almost 70% over the past 5 years..
Skyworks Solutions, Inc. (NASDAQ : SWKS) designs and manufactures proprietary semiconductor products worldwide. Semiconductors are among the strongest names in the market today. This stock is a rare combination of high performance year-to-date accompanied by a low relative valuation. It shows a price-to-earnings (P/E) ratio of just over 20. This valuation is discounted to the market, giving this best tech stock even more room to go higher.
Furthermore, this firm is getting an early start in the 5G space. The U.S. government recently stated their intents on 5G technology. Whether or not he government gets involved is irrelevant. They started the conversation, and companies know profit opportunity exists. SWKS is in a prime position to generate new revenue from this initiative.
Cheapest Tech Stocks
One successful investing strategy involves buying stocks at discounts. If an entire sector is moving higher, some investors look to buy cheap names assuming they will grow into their valuations. This section discusses tech names with low P/E ratios.
Micron Technology, Inc. (NASDAQ : MU) provides semiconductor systems worldwide. The company started in the late 1970s, surviving the hardest times in the tech space. It has a P/E ratio under 10, allowing for tremendous upside potential. Compared to the average semiconductor P/E of over 20, this name is a deep discount.
Additionally, the company shows double digit growth on both EPS and sales growth over the past 5 years. The company is still growing, and is still cheap. This is a rare characteristics of a best tech stock. The stock trades over 42 million shares daily, making it one of the thickest names in the market. This is necessary for traders who need large positions, and makes execution risk minimal.
Texas Instruments Incorporated (NASDAQ : TXN) designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. This company is among the oldest and most successful semiconductor, dating back to 1930. The stock has a P/E ratio of almost 20, giving it a more normal valuation. Investors still look to this name for abnormal returns. It offers a dividend of over 2.5%.
Lastly, This best tech stock to buy now shows a great return-on-equity (ROE) of almost 40%. This shows investors their money is being used and returned to them in an efficient manner. It is yet another way that shows the relative value of this semiconductor stock.
Largest Market Cap Tech Stocks
Investors looking to benefit from companies that move the entire market look to the largest market caps. This metric shows how big a company is relative to another. The market gives the biggest market caps to the strongest names. These, in turn, lead the indexes in either direction.
The NASDAQ-100 index is a cap weighed index. Tech names with the biggest valuations sit in the driver seat of this large and well-followed index, as mentioned above.
Apple Inc (NASDAQ : AAPL) designs, and manufactures devices and personal computers to consumers worldwide. It is the biggest company in the world, and also a part of the Nasdaq-100. For this reason, if AAPL is up or down on the day, investors make high probability bets on the rest of the index.
Additionally, institutions looking to track an index will need to buy or sell large amounts of this stock when it moves. This increases liquidity and makes trading more efficient. Despite its industry and market prowess, the stock shows a P/E of 16, still giving it a discount to the market as a whole.
Alphabet Inc (NASDAQ : GOOGL) provides online advertising services in the United States and internationally. This firm shows a market cap of over $700 billion, making it an industry giant. The stock also has an ATR of over $25, making it a large mover.
Despite its volatility, is is a liquid name, trading over 1.5 million shares daily. Traders who find themselves on the right side of this stock see enormous profits. The valuation is high in this name. High valuation stocks that lead the market tend to continue to increase in value. Furthermore, this stock has over 25% earnings-per-share (EPS) growth over the past 5 years. This industry giant continues to dominate its space, and reward tech investors.
In conclusion, these best tech stocks to buy now gained their reputation through generating profits for investors. These are not scams or fly by night companies. They survived the dotcom crash and the financial crisis. Even today, tech shows the highest returns of any sector. Most noteworthy is their low level of volatility. As these name continue to gain value, the volatility decreases, allowing investors low risk entries.