What are the best technology stocks by market performance?
Investors have often taken a shine to technology companies due to their potential to change the world and their prospects of realising outsized market returns.
This investing preference has grown as tech-savvy millennial investors entered financial markets to own a piece of their favourite tech brands, such as Apple (AAPL), Alphabet’s Google (GOOGL) and Meta (META).
The market has paid back this good faith with hefty gains. The tech-exclusive US Tech 100 Technology Sector Index has outperformed the US benchmark S&P 500 Index (US500) over the last five years, as of 21 December, despite a fall in tech valuations in 2022.
Are you looking for the best tech stocks to buy in 2023?
In this article, you will learn about the latest technological trends and find a list of the top technology companies ranked by market performance over the past three years.
Note that this article does not consitute financial or investment advice. Before you choose to trade or invest in any technology stock, always do your own research.
Why is tech a market favourite?
Technological advancements seen across human history are sights to behold. From the creation of the wheel to the internet, innovation has helped humankind improve the quality of life by introducing life-enhancing goods and services.
Individuals and companies have made a lot of money along the way by solving problems. Technology not only solved core needs like electricity and healthcare, but also brought new efficiencies, quality and conveniences that consumers spend on.
Today, technology companies like smartphone maker Apple, software company Microsoft (MSFT) and Google-parent company Alphabet are among the top five companies that make the highest annual earnings in the world.
Over the decades, these tech giants have returned bumper profits to investors. Take Apple, for example. An early Apple investor in 1982 would have seen their shares grow by 104,380% by December 2022.
Investors are drawn to tech stocks by similar wealth-building stories resulting in promising tech firms reaching multi-billion dollar valuations even before returning a profit.
What is your sentiment on NVDA?
Tech trends to watch out for
Here we look at top technology trends identified, assessed and ranked by research firm McKinsey & Co based on five measures of activity – search engine queries, news publications, patents, research publications and investment. Investors will find these trends insightful when looking for best tech stocks to watch in 2023 and beyond.
Applied AI
Applied artificial intelligence (AI) received the highest innovation score of all tech trends due to its large potential impact, according to the McKinsey Technology Trends Outlook 2022 report.
The use of self-learning software for automation and problem-solving saw massive adoption of AI-based solutions across several industries. Applied AI included innovative technologies such as:
Machine learning used for schedule optimisation and project management.
Computer vision used for facial recognition and 3D model generation.
Natural-language processing used for speech recognition in virtual voice assistants.
Deep reinforcement learning used in robotic-arm motion in manufacturing and autonomous driving.
Knowledge graphs used for social network analysis and marketing.
Over 56% of 2021 survey respondents said their organisation were adopting AI, up from 50% recorded in 2020. While 67% of respondents reported revenue increases post-AI adoption.
Advanced connectivity
Advanced connectivity includes technologies, such as 5G/6G cellular networks, wireless low-power networks, low-Earth-orbit satellites and optical fibre. The McKinsey report said the adoption of these technologies will disrupt four major industries: automotive and assembly, healthcare, aerospace and defence, and retail.
Notably, the combination of AI and advanced connectivity technologies is expected to be a major boon for patients with chronic illnesses, allowing them to be monitored at home using connected medical devices.
Bioengineering
The field of bioengineering was divided into four areas:
Biomolecules that involved the study of genomics and intracellular engineering.
Biosystems that studied complex biological organisations, processes and interactions.
Biomachine interfaces that referred to innovation in connectivity between nervous systems of living organisms and machines.
Biocomputing that studied cells for computing information.
Some of the emerging benefits of bioengineering included the discovery of treatments for incurable diseases, laboratory cultivation of animal and plant-based meat, creation of sustainable biomaterial alternatives like vegan leather and invention of superior materials.
According to the report, bioengineering tech is expected to have the highest impact on the healthcare sector followed by agriculture, chemicals and consumer packing industries.
Clean energy
According to McKinsey, clean energy tech trends included energy solutions that aimed to achieve net-zero emissions across the energy value chain from power generation to production and distribution.
Renewable energy, sustainable fuels, hydrogen-based fuels, long-duration energy storage solutions, intelligent power grid systems and electric vehicle charging infrastructure were notable clean energy trends.
“Although most of these pledges have yet to be translated into concrete policies and actions, the continued growth of low-carbon technologies shows that key enablers for the energy transition keep momentum.”
Mobility
According to McKinsey, mobility is at a “second great inflection point” as the automobile and aerospace sectors shift towards autonomous, connected electric, and smart technologies.
The report suggested disruption in passenger and goods transport systems due to innovations such as robot-taxis autonomous trucks, and last-mile delivery solutions such as sidewalk robots.
McKinsey noted potential air mobility disruptions such as vertical takeoff and landing air taxis, hypersonic air travel, unmanned air freight vehicles and unmanned traffic management systems.
Tech trends to watch in the mobility sector were autonomy, connected vehicles, electrification, smart mobility, advanced lightweight materials and value chain decarbonisation.
Other notable tech trends
Mckinsey noted nine other technology trends in its report:
Cloud and edge computing
Immersive-reality tech
Industrialised machine learning
Next generation software development
Quantum technologies
Trust architecture and digital identity
Space technologies
Sustainable consumption
List of best technology stocks by market performance
Please note that most technology stocks have suffered a slump in market valuations in 2022 following the start of a global monetary tightening cycle. As of 22 December’s close, only one company out of the 37 constituents on the US Tech 100 Technology Index posted year-to-date gains. The index has fallen about 40% year-to-date in 2022, as of 22 December’s close.
Below are the top 10 technology stocks by market performance over the past three years, based on their closing prices on 22 December. Companies on this technology stocks list were constituents of the US Tech 100 Technology Index at the time of writing (23 December). The Index had 37 constituents classified as technology stocks that are listed on the Nasdaq stock exchange. The list is based on investing.com’s market data, which offered index constituent market performance comparison up to a period of three years.
Nvidia (NVDA) – 157.11%; Synopsys (SNPS) – 132.78%; Cadence Design (CDNS) – 132.25%; Zscaler (ZS) – 129.07%; Fortinet (FTNT) – 127.97%; Pinduoduo (PDD) 124.74%; Crowdstrike Holdings (CRWD) – 117.74%; KLA Corp (KLAC) – 109.90%; Datadog (DDOG) – 96.68%; ASML (ASML) – 88.50%.
Best technology stocks
10 best tech stocks based on the market performance over the past 3 years. Source: Investing.com| Name | Sell | Buy | 1D Chg, % | Buyers Sellers | |
|---|---|---|---|---|---|
| NVDA NVIDIA Corp | 143.63 | 143.75 | -0.990% | 91% 9% | |
| SNPS Synopsys, Inc. | 554.61 | 555.10 | +2.490% | 82% 18% | |
| CDNS Cadence Design Systems, Inc. | 305.58 | 306.08 | +0.560% | 75% 25% | |
| ZS Zscaler, Inc. | 209.28 | 209.70 | +4.520% | 100% 0% | |
| FTNT Fortinet, Inc. | 93.73 | 93.92 | +1.610% | 91% 9% | |
| PDD PDD Holdings Inc | 105.03 | 105.16 | -9.680% | 90% 10% | |
| CRWD CrowdStrike Holdings Inc | 359.91 | 360.22 | +3.260% | 91% 9% | |
| KLAC KLA-Tencor Corporation | 632.90 | 634.28 | +2.330% | 83% 17% | |
| DDOG Datadog Inc | 144.68 | 144.85 | +4.620% | 79% 21% | |
| ASML ASML Holding N.V. | 664.19 | 665.04 | +0.880% | 99% 1% |
It is important to note that this article does not constitute financial or investment advice. Before you choose to invest in any technology stock, always do your own research and remember that your decision should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money.
The bottom line
If you are interested in investing in any of the top technology companies, remember that past performance does not guarantee future returns. Always conduct your own due diligence before trading, looking at the latest news, technical and fundamental analysis, and a wide range of commentary.
There are no guarantees. Markets are volatile. Never trade more money than you can afford to lose.
FAQs
Are tech stocks still a good investment?
Tech stocks are popular among investors due to the exciting innovations they offer. However, investors should conduct due diligence before investing in stocks. Remember that past performance does not guarantee future returns. And never invest more money than you can afford to lose.
Will technology stocks go up or down?
No-one can say for sure. The tech-exclusive US Tech 100 Technology Sector Index has fallen over 37% in 2022. However, past performance is not a reliable indicator of future results.
Should I invest in technology stocks?
Your decision to trade should depend on your attitude to risk, your expertise in the market, the spread of your portfolio and how comfortable you feel about losing money. You should never trade more than you can afford to lose.
Always conduct your own due diligence before trading, looking at the latest news, technical and fundamental analysis, and a wide range of commentary.
Markets in this article
