New to the investing world? On the hunt to pick out 10 of the best tech stocks to buy? Here we have selected the best performing tech stocks every investor should consider to add to their collection and how to go about buying these exciting assets.
Top 10 Best Technology Stocks to Invest in
There is one thing for sure, when it comes to the technology sector this market is arguably the most innovative market in the world. Technology companies big and small across the globe continue to expand in the 21st century in various ways with their products and services like no other sector.
According to data, the U.S holds the title of having the largest tech market, with the U.S tech sector reportedly worth over $1.6 trillion in value. This financial result holds the largest contribution to the U.S economy by approximately 34% so far in 2021. Looking at the growth prospects for this exciting industry, analysts are forecasting that this sector’s revenue could reach a high of almost $5 trillion before the year is out.
Too much growth to miss out on right?
Despite the recent market cool off across the broader market, when we take a look at the bigger image for the tech industry it may seem inevitable that the world and this industry will spring back to normal times upon the ease of lockdown restrictions. But in fact, it's worth noting that we are entering a new normal society where remote working may and looks highly likely to continue, virtual roles will become more popular and the innovation of communication will continue to evolve. So in actual fact, the new post-Covid world looks to benefit from greater growth than ever before.
In recent days many contributing factors have turned both new and experienced investors to look towards tech stocks. Firstly, the rate of inflation is slowly creeping up with it being reported that inflation is at its highest levels since 2018 with fears that prices could rise by just shy of 5% over the next year.
Additionally, Covid-19 infection rates are globally increasing which is another reason why investors are swaying towards tech stocks, as it was tech stocks who arguably were the biggest winners during the pandemic. Take the likes of Amazon (AMZN) reaching record revenue of $386 billion in 2020, a 38% jump YoY and Zoom Video Communications (ZM) who witnessed its revenue jump from $623 million in 2019 to its impressive revenue return of $2.65 billion in 2020.
At the same time tech stocks naturally do evolve and look to improve their current products and services. Take the iconic tech brand Microsoft (MSFT) as a prime example who in recent days has revealed its new Windows 365 service, a service that is entering the cloud space enabling businesses to access cloud space from anywhere in the world.
Despite this year's tech sell-off, this leading industry is once again on the road to recovery and it is showing as the leading S&P 500 index is currently up around 15% so far this year, with the Dow Jones Industrial Average joining suit being up just above 13% in 2021.
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Contents:
- Basics To Know When Looking To Invest In Tech Stocks
- 5 Popular UK Tech Stocks To Invest I
- 10 Most Popular Tech Stocks To Invest In
- Investing In The Best Tech Stocks On The Market
- Overview: 10 Tech Companies To Invest In
Basics To Know When Looking to Invest in Tech Stocks
Before jumping straight into the deep end of investing in the best tech stocks on the market, you have to do some solid homework and take a look at a company’s main basics to see if it is a good move to buy shares within a tech stock of interest.
Here are a few basic points you need to consider before investing in teck stocks:
1. Know the ins and outs of a company
One of the first and the most obvious points is to look at what a company entails and know exactly what it has to offer. Take Amazon (AMZN) as an example as this giant tech stock has its hands in numerous avenues that you may not be aware of until you dig that little bit deeper. By knowing the full understanding of what a company has to offer you will also be aware of why the demand is strong and what it could look to achieve in the future.
2. Does the stock have a strong management team?
Behind every successful company lies strong management. Having a strong management team to handle and make strategic decisions that get passed all the way down to the other end of the chain is the ultimate way that a stock will give shareholders value.
You can look further into this avenue by taking a closer, more detailed look into a specific company's management team which will give you a clearer image of the stock's style and how it operates.
Take Tesla (TSLA) as an example. Even though Tesla (TSLA) has become one of the latest hottest tech sensations on the market its CEO Elon Musk is one business figure that many may deem to be a ‘risk taker’, and one that could potentially look at losing value for investors with his somewhat ‘rash’ decisions.
3. Is the company making money?
Sitting in a profitable position is a good and clear indication that a company is doing something right. The way you can seek to find out where a company is sitting financially is by taking a closer look at the company’s balance sheet and keeping an eye on frequent updates. When talking about updates, this refers to company news and factoring events that may have an impact on a stock's share price, for good and for bad. It pays to keep up to date with all relevant stock info.
4. Where does the company sit within the market?
Looking at where a tech stock of interest sits within the market is important. For example, a company may be new to the market and not yet firmly found its footings or it could be a dominating market leader. Aside, it is also healthy having competition regardless of which market a stock is within but be prepared as it will require more work to find out more information of where a company is sitting amongst others within the market.
5. Is the company sustainable and can it look to future growth?
If a company is showing great gains, one of the next steps is to look into seeing if this success can be sustained. If you're looking at the long-term outlook this is an essential part of the process as you want to look at investing in a stock that has strong growth moving ahead.
If you're looking at the short-term this won't be as relevant about what the future holds for a company. A great way to establish if a stock has more to give within its tank is to collectively look at the various factors including those mentioned above, taking a look at a stock's sales growth and lastly if a stock has a strong target market.
All of these factors are ultimately what will further a stock's success.
Popular UK Tech Stocks to Invest in
Before we head over to take a look at the biggest tech stocks to invest in, we have also picked 5 top-performing UK tech stocks that investors should consider.
Although the US is home to some of the biggest technology companies in the world, it's also advised that if you are in a position to broaden your horizons that investors should look to consider adding international stocks to the mix. As it stands the UK tech market is positioned 4th in the world and has witnessed a good display over 2020 including bringing that momentum forward into 2021.
Based on their recent performances, their unique selling points within the market and the strong consumer demand, here are 5 top UK tech stocks to consider.
There is a large number of publicly-listed UK tech companies that you can invest in. These include:
1. Revolut
One of the latest tech stocks to sweep across the market is the app all about money, Revolut. Now reportedly holding a valuation of approximately £24 billion and rising, this fintech company is placing itself nicely among its biggest competitors.
2. Sage
This British multinational software company has gained a huge target audience over 2020 as the company aims to help small-medium sized businesses get the software they need at affordable prices. As more individuals turn their hands to self-employment this software stock looks to be one strong pick for consumers.
3. Kainos
Another software company that has been proven to be a great long-term player is Kainos Group. Averaging 25% in earnings per share (EPS) per year and continuing its run in 2021 by being up by 2.5% within its share price over the past month, makes this tech stock one to consider.
4. Cerillion
This British telecoms company has seen an impressive rise by over 50% within the past 3 months, alongside holding an attractive ROE of 25% helps make this UK tech stock one of the best on the market today.
5. Ocado
One of the largest tech stocks to grace the UK market is Ocado Group. Bringing in total revenue across the group to £2.33 billion in 2020 and so far in 2021, Ocado has confirmed growth within the first half of the year as its revenue has risen to £1.3 billion, up by 21.4% YoY making this tech stock one you may not want to miss out on.
Read Also: 5 UK Growth Stocks To Buy Today
10 Most Popular Tech Stocks to Invest in
Now it's time to take a look at the best tech stocks on the market today that all investors should consider adding to their portfolio collection.
- Amazon (AMZN)
- Microsoft (MSFT)
- Apple (AAPL)
- Alphabet (GOOG)
- Netflix (NFLX)
- Facebook (FB)
- Pinterest Inc (PINS)
- Walt Disney Co (DIS)
- Adobe Inc (ADBE)
- Tesla Inc (TSLA)
Amazon (AMZN)
One of the biggest performing tech stocks perhaps the world has ever seen and a clear investor favourite is that of Amazon (AMZN).
One of the first points to mention about Amazon (AMZN) is that although the stock has proven that it is capable of huge growth, it still has a lot more growth potential ahead. Looking forward AMZN will look to further establish itself within the online world and its other avenues as well as pushing into new avenues such as self-driving cars and more.
Looking at Amazon’s past history the stock has witnessed its revenue soar over the years, where in 2020 the tech giant reached its all-time revenue high of $386.06 billion, up from $280.52 in 2019.
On the back of this, Amazon does come at a more costly price than other tech stocks on the market with a share price today standing at $3,573.
There is no telling if this tech giant will continue its flying high results in the long-term but as the stock continues to innovate into new areas and expands its current, alongside the company's trusted consumer audience remaining strong will leave this stock no doubt reining for many more years to come.
Microsoft (MSFT)
The iconic and one of the most valuable tech companies on the market is Microsoft (MSFT). The stock is continuing to innovate as the years go by and it has worked nicely for this giant tech company as it currently holds a valuation today of over $2.10 trillion.
Just like most tech stocks, Microsoft (MSFT) managed to deliver in 2020 increasing revenue to $143 billion over the year and lighting up green across the board.
So what’s MSFT upto in recent days you may ask? Quite a lot to miss out on.
Over recent years MSFT has pushed forward within its gaming segment and now into the world of cloud computing, which according to the company’s latest reports is the biggest and fastest driver in terms of growth for the company. On the back of this, welcome the new Microsoft Windows 365 and Cloud PC that enables users to stream a Windows device from anywhere in the world that has been labeled to be the next generation mainstream platform. Aside, Microsoft has released more Xbox Series X consoles globally following the strong surge in consumer demand following its initial release back in November 2020.
Taking into consideration this stock's future growth capability and its evidenced performances over many years, MSFT sits on a more affordable price compared to others with a share price of $280.75, currently up by around 22% in the first half of 2021.
Microsoft has been known to be the golden tech stock for long-term investors over many years and it looks as though it is set to continue.
Apple (AAPL)
Apple (AAPL) has grown significantly well over the years and become included as part of the ‘FAANG’ acronym being named as one of the five top-performing and most popular American tech stocks in the world. Its products popularity makes this tech stock a perfect long-term buy-and-hold investment.
Apple (AAPL) continuously reports fantastic revenue results led by its iconic products such as iPhone, iPad, iTunes, Apple Watch, Apple TV and more. However, besides all of these popular and in demand products AAPL also designs and creates Macbook Pro and Macbook Air high-design computers which in Q4 2020 witnessed its revenue add an additional $1 billion YoY.
Following an event in April 2021, Apple announced new products that are now available on the open market including AirTags (a small button shaped tracking device to help you secure lost or stolen items), updated Apple TV 4k, new iMac models and more. Looking ahead, Apple has already announced their future plans of entering into the automotive space, foldable iPhone’s and smart glasses to name just three substantial growth avenues.
AAPL is currently trading at $146.39 per share upon writing, and given its future outlook, it looks as though this tech stock is going to continue to keep on bringing in the positive results.
Alphabet (GOOG)
Alphabet (GOOG) is the parent company to search engine Google and has an array of products held underneath its umbrella such as YouTube, Google Ads, Chrome, Google Maps and more.
Being closely linked to Amazon in relation to its capability and size, Alphabet (GOOG) is currently ranked the 4th most valuable US tech stock in the world behind that of Amazon (AMZN), Apple (AAPL) and Microsoft (MSFT).
In full year 2020 GOOG had an impressive run gaining a revenue result of $182.5 billion, up from $161.9 billion in 2019. Looking at what analysts are predicting for the future, 29 analysts who are covering the stock are looking for revenue to hit above $200 billion by the end of 2021, which could arguably put GOOG above one or perhaps two of its highest competitors.
This stocks main focus as of late is with the cloud division, and rightly so after the company announced within its latest report that its cloud division brought in $4 billion in revenue making up almost 7.5% of the stock’s overall revenue within its latest quarter. Aside from this new avenue, the company's main income stream, Google generated 82% of the stock's revenue and YouTube also generated an increase in revenue growing by 49% to $6.01 billion for the quarter.
GOOG currently holds a share price of $2,636 upon writing this report. But nevertheless, if this stock is sitting within your price range it is certainly one you may wish to add to your portfolio and to keep for the long-haul.
Netflix (NFLX)
Arguably the most popular streaming video platform in the world today is that of Netflix (NFLX). And it's looking as though the momentum will continue for the popular network as the stock announced that paid subscriptions increased by 14% YOY to $208 million in Q1 2021, confirming a rise in demand despite missing out on the stock’s 210 million estimated forecast.
One thing that is for sure with Netflix is that it has more growth potential to give moving forward. As it stands North America currently holds the largest market for Netflix in the world with over 74 million paid subscribers, but when you factor into the equation countries with a higher population such as India, China and South America if the streaming platform continues to dominate this is a whole lot of growth potential ahead.
Aside from increasing consumer demand, Netflix has reportedly been looking at other potential growth prospects and according to recent reports, it may be that the company is looking to add a gaming component into the mix which will definitely captivate a new audience for the platform.
Additionally, Netflix sits in a very healthy financial position with a ton of cash to hand, so it may even turn out that another big player may look at merging with the stock to go on to produce unique content in the future.
Currently trading at $530.31 upon writing this report and ahead of its release of its Q2 2021 results, this streaming stock seems to be one that is ahead of the game.
Facebook (FB)
The social media giant Facebook (FB) owned by Mark Zuckerberg continues to be a force on the market. What is also worth noting is that Instagram and WhatsApp are two very popular social platforms that also fall under the Facebook umbrella.
Despite legal challenges that the company has been and is still up against the stock always manages to pull through. To show its strength, FB confirmed that as a group including its products and services held just under 3 billion active users worldwide in Q1 2021, and the company’s revenue grew by just under 48% to $26.2 billion within the quarter.
Not a bad result at all.
Also included within the stock's recent Q1 report was the company’s growth plans including its new adventure to rival its competitor TikTok. FB is looking to set aside $1 billion for content creators to attract users in order to bring in engaging content that will attract new light for the social giant.
The above mixed with Facebook entering the world of virtual reality with the likes of its Oculus VR headsets are just two big routes that will add to this unstoppable growing tech stock.
Facebook currently trades at $341.16 upon writing this report and is slowly pushing its way to reach the $1 trillion value mark which could easily be reached by the time 2021 is out.
Pinterest (PINS)
Whilst the majority of the stocks on this list have been public for some time, Pinterest (PINS) on the other hand is one tech stock that is relatively new in comparison, yet this social platform is one that looks to be one for the long-haul.
In short, Pinterest (PINS) is a unique image sharing platform that enables users to create their own personalised mood boards known as ‘Pin Boards’ that are filled with designs, recipes, art, travel ideas and much more. Alongside, PINS also allows users to buy products directly from images that are connected to the brand in question.
PINS has had a rollercoaster ride since it first became public back in 2019, and as of today the stock sits on a share price of $69.98 which seems to be rather active for what it can achieve.
Within the stocks Q1 report, PINS reported a 78% growth in revenue YoY reaching $485 million and its monthly active users (MAUs) increased by 30% YoY to 478 million in Q1 confirming that that steady growth is visible. Looking ahead, the stock is forecast to rise by over 100% in revenue in 2021 thanks to its unique creativity and strategic strong partnerships with Shopify (SHOP) when looking to purchase products and its partnership with Marriott (MAR) upon the return of travel that looks to advertise digital boards full of travel information in storefronts.
PINS came out of 2020 as a platform winner showing that it is capable of achieving success and one that is showing only growing stronger.
Walt Disney Co (DIS)
The home of all things magical is still a solid stock to consider. The good point about Disney (DIS) is that it is so much more than just theme parks and hotels. Disney also has their own cruiseliner, is home to their latest streaming edition Disney+ and you will also find Disney’s acquired brands such as ESPN, National Geographic and many more in the mix.
Over the course of 2020, there is no denying DIS stock took a huge hit as the world shut down, with most of its operations having to be seized. Despite this huge blow, Disney took the time to push its Disney+ streaming platform which managed to help pull back the stock from what could have been a disastrous year to help reach total yearly revenue of $65,388 billion, only 6% down from its previous year.
Looking ahead for Disney, the ongoing Covid-19 pandemic is a huge distribution. However, even though analysts are predicting that revenues may take a slight dip again this year for obvious reasons, Disney’s streaming platform Disney+ is forecast to more than triple over the year and no doubt more Disney operations will be added to the mix as restrictions ease.
In the long-term Disney looks to have the upper hand as it will continue to be a favourite amongst all ages all across the world. Being given a price target of $220 this year by JPMorgan confirms that Disney has the potential to reach an upside of 27% from its price today of $172.95.
Adobe Inc (ADBE)
Although some may say this tech stock is not the most exciting of them all it still however has the potential to offer investors great value.
Firstly, Adobe Inc (ADBE) is a computer software company that is designed for creatives. And one strong point that stands out is that the world is vastly becoming taken over by the digital world including social media where many are looking at Adobe as their go-to software of choice.
Following the pandemic, ADBE managed to pull in record yearly revenue of $12.87 billion, a 15% increase YoY. Fast forward to what is happening now for the stock, Adobe is already 23% up in revenue in Q2 with revenue hitting $3.34 billion for the quarter.
Looking at the long-term prospects for this stock ADBE has amples of different routes that it could take as it sits in a rather healthy financial position. So we may just see some new changes evolving in the coming year as this stock looks to new horizons.
Tesla Inc (TSLA)
The last tech stock that has arguably become the talk on many individuals' lips over the past year is that of Tesla Inc (TSLA).
Despite opinions, there is no denying that CEO Elon Musk’s frank, bold and futuristic visions are looking to shape up the image of the future. Mixing electric vehicles with other products such as energy-saving battery products and much more, TSLA is proving to be the firm favourite for many as it takes the lead within this industry.
Coming up to the Q2 2021 release date, if the stock's Q1 Performance is anything to go by Tesla is looking to increase once again. In Q1 TSLA grew by 74% in revenue YoY reaching $10.39 billion including reaching net income of $438 million off the back of strong sales demand.
This stock has much more to give within its pipeline including the company’s latest new version, Model S Sedan being available on the market and the company’s Model X which is set to become available from the third quarter in 2021.
Just like Apple (AAPL) and others, Tesla has a split stock which today sits on the market at $638.10, almost -30% down from its 52 week high of $900 it reached at the start of the year.
Investing In The Best Tech Stocks on The Market
Now knowing the best tech stocks to invest in right now both internationally and within the UK, now it's time to look at how you can go about investing in them.
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Overview: Tech Companies to Invest in
The technology industry is an industry that has been a popular and solid favourite for many investors over the years. And as more rapidly evolving technology products join our everyday lifestyles at a much quicker rate than ever before leads to believe that this industry will continue to be one of the main players on the market for the foreseeable future.
If you are new to this market adding one or two of these top tech stocks to your collection could be advantageous for many reasons with the main advantage being the value that these exciting stocks can bring to their shareholders. And although these tech stocks may be the biggest players on the market they do still come with their own risk elements that you have to be aware of before looking to invest in them.
So before you jump straight in, conducting additional research on your chosen tech stocks is strongly advised.
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