7 Best-Performing Tech Stocks for March 2024

Technology stocks were a hot topic in the early days of the pandemic. Companies that provided quick and innovative solutions to the problems of a changing world were rewarded handsomely by the stock market.

Enthusiasm has since waned over concerns that an impending recession will hit technology companies particularly hard. High inflation and the sharply rising interest rates that come with it often mean lower profits for debt-laden tech companies.

But there’s a good reason why many investors remain interested in tech stocks. Technology will play a big role in the future and help solve problems related to sustainable energy, automation, healthcare, and housing.

Here we outline what tech stocks are, a list of the best-performing tech stocks right now, and your options for buying them.

What are technology stocks?

Technology stocks are publicly traded stocks of companies that specialize in developing and selling technology products and services. You’re probably at least familiar with some of the major companies in this field: Apple (AAPL),Amazon(AMZN) and Google (Google) is a high-tech giant with some of the highest levels of technological prowess. Market capitalization In the stock market.

The tech sector is also one of the largest and most diverse sections of the stock market. Companies under the technology umbrella span multiple industries and offer a vast range of services and products.

The Global Industry Classification Standard (GICS) makes this easier to understand by grouping tech stocks into three main categories: software and services, hardware and equipment, and semiconductors. Companies may fall into one category or may span multiple categories, depending on the services they provide.

Semiconductors and semiconductor devices

Companies that produce software or services for technology-based industries such as cybersecurity, data analytics, cloud computing and storage, artificial intelligence, workflow and project management, video streaming and conferencing, and social media.

Companies that manufacture or sell physical technology products such as laptops and computers, printers, hard drives, AI home assistants, GPS devices and smart watches, phones and appliances.

Companies that create and manufacture the various chips, circuits, and other physical components that power electronic devices such as phones, computers, and cars.

Best performing tech stocks

Below are the seven best-performing stocks in the technology sector of the Nasdaq 100 index, ordered by one-year return.

Advanced Micro Devices Co., Ltd.

Source: Finviz. Stock data is current march January 2024for informational purposes only.


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Advantages and disadvantages of investing in tech stocks

Deciding to invest in tech stocks also means looking beyond a single company’s performance and earnings. It’s important to understand the positives and negatives of how tech stocks work within the market. Some considerations:

Advantages of tech stocks

Diversification. The technology sector spans a wide range of industries, as well as product/service categories such as cloud computing, e-commerce, and social media services. This gives investors room to diversify their holdings across companies large and small.

growth. Big risks can also come with big rewards. This belief is especially evident in the technology sector. Tech stocks are viewed by many investors as an opportunity to invest in cutting-edge technology that can pay off if a company’s products or services take off.

Cons of tech stocks

Volatility. Economic trends such as data breaches, competition, and rising interest rates can affect the performance of tech stocks, which in turn can affect their stock prices. Also, compared to other sectors, the high-tech industry has a higher concentration of less established companies that may not yet be profitable, which can make it more difficult to assess the risk of an investment. there is.

very high rating. Tech stocks are known for being highly valued. This may sound like a good thing, but if a stock is highly valued, its performance needs to keep up with its valuation to justify that price. If earnings and earnings lag behind initial valuations, the stock price will quickly plummet, leaving investors who bought at a high price feeling very…well, cheap.

Very few companies offer dividends. If dividends are important to you as an investor, you may want more tech stocks. While some of the industry’s largest companies, including Apple (AAPL) and Intel (INTC), offer this perk, the majority of companies in this space sell their earnings rather than distribute dividends to shareholders. They tend to reinvest.

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How to invest in tech stocks

How you choose to invest in tech stocks depends on your investment strategy and goals.

Investing in individual tech stocks

Choosing to put a large amount of money into a single company is not an investment strategy suitable for everyone. This requires caution, research, and consideration of risks. If you go this route, you may also need to: Open a securities account If you don’t have one.

Basic due diligence includes understanding what a company does, what products and services it offers, and how its business model addresses future needs. That must be included. It is also important to check the company’s financial status, such as price-to-earnings ratio, profit margin, and balance sheet.

Experts say it’s a good rule of thumb to limit individual stocks to about 10% of your overall investment, so choose wisely. Finally, consider your risk tolerance and portfolio balance when considering new investments. asset allocation. To learn more about investing, read our primer. How to invest in stocks.

Investing in technology funds

If you’re not sure whether investing in one company is right for you, consider it. Exchange Traded Fund (ETF) or mutual funds Instead. These funds consist of a wide range of stocks and often provide exposure to the tech sector. Purchasing a fund also allows you to diversify your stock holdings, avoiding the risk of pouring your hard-earned money into a single stock.

Another option is an index fund that tracks an established index such as the Nasdaq. Any gains or losses you make will reflect the index that the Fund tracks.

Also, if you’re interested in technology stocks and want to go the fund route, you can consider technology-focused ETFs, mutual funds, and index funds. For example, the Technology Select Sector SPDR Fund (XLK) is a large-cap ETF with over $30 billion in assets under management. The company’s holdings include Apple, Microsoft, and Nvidia.

You can invest in funds through a brokerage firm, or if you prefer a manual approach. robo advisor.

Neither the authors nor the editors had any involvement in the aforementioned investments at the time of publication.

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