Tingo Group, Super Micro Computers, and Air Test Systems are among the best-performing tech stocks this month, each delivering over 300% returns for investors over the past year.
The Technology Select Sector SPDR Fund (XLK), a benchmark for tech stocks, is up about 20% over the past 12 months, outperforming the broader market amid growing interest in artificial intelligence. The Russell 1000 index rose about 4% over the same period.
We consider the top tech stocks in three categories: best value, best growth, and best momentum. Benchmark numbers above are as of June 5th, all data below is as of June 4th.
best value tech stocks
Value investing is a factor-based investment that selects stocks that appear to be trading below their intrinsic value, usually by measuring the ratio of a stock price to one or more fundamental business metrics. It’s a strategy. A widely accepted value metric is the price-to-earnings ratio (P/E).
Value investors believe that if a company is cheap relative to its intrinsic value (measured in this case by P/E), the company’s stock price will rise faster than other companies because the price will return in line with its value. I believe it is possible. Company’s. These are the tech stocks with the lowest 12-month trailing P/E.
| best value tech stocks | |||
|---|---|---|---|
| Price ($) | Market capitalization (market capitalization) ($B) | 12-month trailing P/E | |
| Ogo New Energy Co., Ltd. (DQ) | 36.92 | 2.9 | 1.8 |
| Tingo Co., Ltd. (TMNA) | 0.36 | 0.4 | 2.5 |
| Viasat Corporation (VSAT) | 45.80 | 3.5 | 3.3 |
| Avnet Corporation (AVT) | 44.98 | 4.1 | 4.9 |
| Nokia Oiji (NOK) | 4.02 | 22.4 | 5.1 |
Source: YCharts
- Ogo New Energy Co., Ltd.: Daqo is a Chinese monocrystalline silicon and polysilicon manufacturer that primarily develops products used in solar energy applications. Dako’s stock price fell about 39% last year on news that Dako’s polysilicon price growth had slowed.
- Tingo Co., Ltd.: Tingo is an agri-fintech company that provides a smartphone platform that allows farmers to manage their commercial activities. It primarily serves customers in Africa. It is also listed on Nasdaq under the ticker TIO. Tingo Group’s stock price plunged 80% on June 6 after short seller Hindenburg Research accused the company of a “very obvious fraud.” The company objected to the report, calling it “misleading and defamatory.”
- Viasat Corporation: Viasat provides high-speed satellite broadband and networking services.
- Avnet Corporation: Avnet provides supply chain and logistics services, distribution, and design support for electronic components. Avnet stock has fallen more than 9% over the past year as the broader semiconductor industry faces supply chain issues.
- Nokia Oiji: Nokia is a network infrastructure operator based in Finland.
Fast-growing tech stocks
These are the top tech companies ranked by a growth model that scores companies using a 50/50 weighting of most recent quarter’s year-over-year (YOY) revenue growth and most recent quarter’s year-over-year earnings per share (EPS). It’s a stock. ) Growth.
Sales and profits are both important factors for a company’s success. Therefore, ranking companies by only one growth metric makes the rankings more susceptible to accounting anomalies in that quarter (such as tax law changes or restructuring charges), making either number unrepresentative of business in general. There is a possibility. Companies with quarterly EPS or revenue growth greater than 1,000% were excluded as outliers.
| Fast-growing tech stocks | ||||
|---|---|---|---|---|
| Price ($) | Market capitalization ($B) | EPS growth rate (%) | Revenue growth rate (%) | |
| Canadian Solar Inc. (CSIQ) | 43.40 | 2.8 | 750.0 | 36.1 |
| Gen Digital Co., Ltd. (GEN) | 17.22 | 11.0 | 610.0 | 32.3 |
| ZoomInfo Technologies Inc. (ZI) | 24.73 | 9.9 | 450.0 | 24.4 |
| Shoals Technologies Group, Inc. (SHLS) | 23.80 | 4.0 | 400.0 | 54.6 |
| SolarEdge Technologies Co., Ltd. (SEDG) | 295.79 | 16.7 | 291.7 | 44.1 |
Source: YCharts
- Canadian Solar: Canadian Solar designs, manufactures and sells solar power equipment for residential, commercial and industrial customers. The company’s products include solar modules, inverters, and system kits. Canadian Solar’s sales rose by more than a third in the most recent quarter, driven by increases in its solar module and storage manufacturing divisions.
- Gen Digital Co., Ltd.: Gen Digital is a cybersecurity software and services company. EPS and revenue increased in the latest quarter, due in part to the merger with Avast, which was completed in September 2022.
- ZoomInfo Technologies Inc.: ZoomInfo provides a cloud-based sales and marketing platform that allows users to connect with their target customers. ZoomInfo’s EPS and revenue increased significantly in the first quarter as the company integrated generative artificial intelligence (AI) into several products.
- Shoals Technologies Group, Inc.: Shoals provides electrical balancing services for your system. We service solar power, energy storage, and electric vehicle charging infrastructure projects. System Solutions’ revenue nearly doubled in the first quarter of this year, setting companywide revenue and profit records.
- SolarEdge Technologies Co., Ltd.: SolarEdge Technologies builds and sells equipment and technology for solar arrays. In addition, the company also provides optimization services and monitoring solutions for photovoltaic systems.
Most powerful tech stocks
Momentum investing is a factor-based investment strategy that invests in stocks that increase in price faster than the overall market. Momentum investors believe that stocks that outperform the market are likely to continue doing so because the factors that made them outperform don’t suddenly disappear.
Additionally, the stock is often purchased by other investors looking to profit from the stock’s outperformance, bidding the price even higher and pushing the stock price even higher. These are the tech stocks with the highest total returns over the past 12 months.
| Most powerful tech stocks | |||
|---|---|---|---|
| Price ($) | Market capitalization ($B) | 12 months historical total return (%) | |
| Super Microcomputer Corporation (SMCI) | 234.10 | 12.3 | 373.2 |
| Aehr Test System (AEHR) | 34.21 | 1.0 | 301.5 |
| Bell Fuse Co., Ltd. (BELFB) | 49.37 | 0.6 | 206.1 |
| First Solar Co., Ltd. (FSLR) | 202.40 | 21.6 | 181.1 |
| Lambus Co., Ltd. (RMBS) | 65.54 | 7.1 | 160 |
| Russell 1000 Index | Not applicable | Not applicable | 3.7 |
| Technology Select Sector SPDR Fund (XLK) | Not applicable | Not applicable | 19.5 |
Source: YCharts
- Super Microcomputer Corporation: Super Micro Computer (Supermicro) manufactures energy-efficient servers and storage systems and provides support services worldwide. Supermicro’s stock has soared in recent months, making it a leading server provider for AI platforms.
- Aehr test system: Aehr is a California-based company that provides systems used to screen semiconductor chips. The company’s stock price recently rose after announcing new orders from semiconductor customers.
- Bell Fuse Co., Ltd.: Bel Fuse manufactures and sells electronic components used in a variety of sectors, including the aerospace, military, telecommunications, computing, and transportation industries. Bellfuse’s stock price rose last year as the company’s results improved for several quarters.
- First Solar Co., Ltd.: First Solar designs and manufactures photovoltaic systems and solar modules.
- Lambus Co., Ltd.: Rambus is a fabless semiconductor company that designs and sells memory microchips for use in data centers. Rambus stock has been steadily rising since July 2022, but it didn’t really start rising until early 2023, as excitement around AI and the computing power it requires pushed semiconductor stocks higher.
The impact of inflation on technology stocks
Technology stocks have historically underperformed other sectors during periods of rising inflation. Conversely, during periods of declining inflation, this group typically outperforms the overall market.
For example, the technology bull market from 2009 to 2021 coincided with a historically low annualized inflation rate of 1.7%. But the tech sector led the overall market decline in 2022 as inflation hit a 40-year high of 9.1% last June.
Why are technology stocks so sensitive to inflation? It all has to do with interest rates. Rising inflation means the Federal Reserve is likely to raise the federal funds rate to taper demand.
Rising interest rates affect technology companies in two ways. First, consumers and businesses will have less income to purchase products and services, and corporate profits will slow down. Second, technology companies borrow heavily to fund startup costs, patents, and innovation costs, and rising interest rates increase the cost of servicing that debt.
The opposite happens when inflation falls. The Fed would then likely lower interest rates, which would stimulate consumer demand and reduce borrowing costs for technology companies.
Advantages of technology stocks
Investing in innovation: Investing in technology stocks allows investors to support innovative ideas that have the potential to improve people’s lives. Whether it’s Apple Inc. (AAPL) bringing new health features to its watches or a startup developing innovative semiconductors for the automotive industry, technology companies of all sizes are working to bring innovative technologies to market faster. continues to push the boundaries.
Growth potential: Technology stocks have the potential for significant gains, and investors are usually prepared to pay a premium for future growth.
For example, as of June 5, 2023, the technology sector trades at a P/E of almost 44x. By comparison, the energy and financial sectors had price-to-earnings ratios (P/E) of approximately 6 and 13, respectively.
The biggest gains have been in small-cap tech stocks, but also in mega-cap tech giants like former FANG members Meta Platforms, Inc. (META), Amazon.com Inc. (AMZN), and Netflix Inc. (NFLX). Also included. , Alphabet Inc. (GOOGL) had an annualized return of almost 25% over the past 10 years.
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As of the date this article was written, the author does not own any of the stocks mentioned above.
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