Technology refers to gadget makers, software engineers and streaming service providers – any business that sells products or services heavily infused with technology. Software companies are increasingly moving toward a software-as-a-service model where customers subscribe annually instead of buying a one-time license, providing recurring income for the software company. Modern devices run on semiconductor silicon chips while wireless service providers make up part of this sector as well.
Watch These Top Tech Stocks in 2023
Technology companies are the largest group of globally renowned corporations. Here is a list of highly-rated technology stocks for investors:
Amazon.com (NASDAQ.AMZN), the world’s largest online retailer and major cloud computing infrastructure provider, has long been a popular choice. Now they are embarking on an exciting new chapter with Apple seeing constant growth in their customer base due to their expanding services portfolio.
Intel, trading at NASDAQ:INTC, is one of the world’s largest semiconductor firms. It has made significant investments in production with plans to sell chips to other businesses.
Netflix (NASDAQ:NFLX) is the undisputed leader in video streaming. It invests billions annually into creating engaging content to keep its subscribers satisfied.
Meta Platforms (NASDAQ:META), the world’s largest social media platform, boasts over 2,000,000 active users on Facebook Messenger, WhatsApp and Snapchat. The company sees virtual reality as a key growth driver.
Alphabet (NASDAQ:GOOG) is the parent company of Google (NASDAQ:GOOG) and Android, the popular smartphone operating system.
Meta (formerly Facebook), Amazon.com.au/Apple Netflix and Alphabet.Google are well-known FAANG stocks that have dominated their industries for many years, boasting impressive returns in their stocks over this time – until 2022 when they fell along with nearly every other major stock.
Tech Stocks.
Alphabet Meta was particularly hard hit, experiencing slow revenue growth and lower advertising spending. On the flip side, several technology firms experienced tremendous success; Amazon’s ecommerce sales spiked while customers stayed away. Netflix saw increased popularity as more users joined their service; those confined at home had less time for television watching and more likely bought cellphones or laptops instead.
In 2022, the economic recovery began and IT companies led the charge. Amazon significantly upgraded its online and cloud computing capacities during 2020-2021 in response to unprecedented customer demand – though they reported a loss in revenue of $3 billion over nine months after the pandemic ended.
Microsoft was able to sell large numbers of Computers during the pandemic. Sales volumes reached new highs thanks to working remotely, online education and stimulus money – but these gains were quickly reversed by a bust: worldwide PC shipments fell 16% between 2010 and 2020 with another 29% decline seen in the fourth quarter alone; Microsoft may yet experience another drop in 2023.
Intel is experiencing a difficult time in the PC market. It lost ground to Advanced Micro Devices (NASDAQ :AMD), and couldn’t maintain its share. This led to Intel’s return in 2021 and 2022 with Raptor Lake PC CPUs, sold during even during the worst PC recession. Intel continues to invest heavily in its manufacturing capacity – spending tens of millions annually even as semiconductor prices decrease.
Netflix experienced an unprecedented surge in subscribers during 2020. But its fortunes began to shift when more competition emerged; North American Netflix lost subscribers by 2021 as demand was pulled forward by high-quality alternative providers like Disney+(NYSE.DIS), HBO Max/CBS.TV and smaller streaming service providers that offered customers more choice than ever before. As a result, Netflix altered their policies regarding ad-supported plans and reduced costs accordingly.
Facebook changed its name to Meta Platforms 2021 to better reflect the focus of their virtual reality initiatives. There is currently very little left of this original venture.
Alphabet experienced slow revenue growth in 2022, though its third-quarter revenue increased annually at 6%. Still, by then it had become a major player on the internet and Microsoft had invested as well.
Analyzing Tech Stocks
This ratio measures the profitability potential for mature tech companies. Divide the stock price by earnings per share and you get a multiplier that shows investors how important they place on future earnings growth prospects. Some tech companies might not be profitable yet, and so this equation doesn’t accurately reflect this fact. You need to have confidence in unproven investments if you want them to become profitable; this includes marketing and sales investments which close deals.
An excellent tech stock will trade at a fair price due to its potential growth. Your investment might not be as successful if these projections fail to materialize, so one way to reduce risk is investing directly into tech stocks through an Exchange-Traded Fund. However, investing in high-flying tech stocks such as Ark Innovation ETF NYSEMKT ARKK may be less risky than directly investing in listed tech companies like Ark Innovation ETF NYSEMKT ARKK. Investing in tech stocks can be risky; however it’s possible to minimize it by only investing where you see growth potential.
