As a whole, tech stocks have been doing well this year — but the sector has been carried by a few stars that are having a great 2015.
In fact, the tech sector is a case of some stocks doing very well and others, well, doing the opposite of very well.
As the markets enter the summer doldrums, it’s usually good to look at your portfolio and get rid of some of your more volatile and speculative holdings and enjoy the summer.
That doesn’t mean “sell in May and go away.” It simply means stick to solid companies now because in this kind of market, especially with a low-volume summer approaching, quality will be your best choice for a stress-free summer.
And if you’re looking for some good long-term growth picks, these seven tech stocks should be at the top of your list. They’re tech in its broadest context but each dominates a crucial niche as tech becomes ubiquitous in all areas of our lives.
7 Big Tech Stocks Worth Your Attention: Apple Inc (AAPL)
If you’re talking about the world’s top tech stocks, you have to start with Apple Inc (NASDAQ:AAPL). It’s hard to imagine that just 10 years ago, AAPL stock was trading at $5 a share (split adjusted). Few people thought the company was going to be able to survive for the long term.
They were wrong. It now has a market cap of $750 billion.
This high-end niche player became a global force, first with the iPod and then the iPhone. Now that it’s reached escape velocity, the question now is where is it going to put the hundreds of billions of cash it has piled up.
Just this week, CBS Corporation (NYSE:CBS) confirmed it is in talks with AAPL regarding television programming. The Apple Watch just launched and last year’s mega deal for Beats is still maturing.
The fact is, with so much cash on hand and such global brand recognition, AAPL will remain the premier tech stock for years to come. The irony is, this once-fringe player is now more the corporate granddaddy of tech. But shareholders aren’t complaining.
For the year, AAPL stock has almost tripled the performance of the broader NASDAQ index. What’s more, it continues to add to its dividend, which now sits around 1.6%.
That’s not compelling for an income stock, but for all the promise of growth AAPL still has left, it’s a nice bonus.
7 Big Tech Stocks Worth Your Attention: Amazon.com, Inc. (AMZN)
Remember when Amazon.com, Inc. (NASDAQ:AMZN) was just a bookseller? Yes, it was a disruptive concept back then. And it has certainly changed the face of publishing in the ensuing years.
But AMZN wasn’t a new kind of bookseller. It was a new business model that proved its worth in the publishing sector.
Since then, AMZN has taken on big-box retailers, cloud storage networks and tablet makers.
And most recently it started the whole stir about drones. When CEO Jeff Bezos announced on the TV news show 60 Minutes that he was looking into delivering packages using drones, it captured the imagination of a huge swath of Americans.
Its Bezos’ ability to reimagine seemingly mundane things in new and exciting ways that continues to fuel this business. But that growth hasn’t come cheaply. The company spends when it sees opportunities and doesn’t really concern itself with steady-Eddie quarterly growth.
Bu the risks have paid off handsomely as of late; the stock is up nearly 40% in 2015 after a less-than-stellar 2014. But if you stretch out AMZN’s growth over the long term, it is a great tech stock to have in your portfolio.
7 Big Tech Stocks Worth Your Attention: Visa Inc (V)
You may not think of Visa Inc (NYSE:V) as a tech stock, but if you think of how quickly we’re transitioning to a cashless society, you get a taste of how Visa fits into this facet of tech.
Visa is essentially a middle man between banks and consumers. It covers consumer spending on credit or debit cards until the banks confirm the transaction and allocate the cash. Since this takes risks off the banks and allows a trustworthy brand to secure transactions for consumers, it becomes a very popular resource.
That’s why Visa takes it cut from merchants who also rely on it to clear transactions for them, for a fee.
The growth here isn’t necessarily in the North America and Europe as much as it is in developing nations in South America and Africa. As more merchants have access to electronic fund transfers and can move away from cash transactions, the faster the Visa brand will grow.
There’s also enormous latent opportunities in the credit card market as well if the economy continues to recover.
7 Big Tech Stocks Worth Your Attention: Walt Disney Co (DIS)
What does Walt Disney Co (NYSE:DIS) have to do with tech?
Well, Steamboat Willie (1928) was the first fully synchronized sound cartoon. Fantasia (1940) was the first commercial film produced in stereophonic sound.
Disney has always been on the cutting edge of content production and creation. And the digital world is all about content.
That means DIS will play an indispensable part. When the economy is slack and theme park attendance is slow, DIS has its content library as well as new releases to get people watching. It also owns television network ABC and cable giant ESPN.
ESPN is doing some especially interesting things with live sports events online. The online streaming of live events is very popular now and not surprisingly, DIS is in a leadership role.
Add to all that the fact that DIS has cut a deal with Electronic Arts Inc. (NASDAQ:EA) to license Star Wars games for the next 10 years. This, along with the long-awaited seventh film in the Star Wars franchise later this year, will add longevity to a brand that needed a way to access an entirely new generation of kids.
7 Big Tech Stocks Worth Your Attention: Intel Corporation (INTC)
In a world where everything is connected, or in the midst of being connnected to everything else, the company that is power all this connectedness in Intel Corporation (NASDAQ:INTC). It’s the world’s largest semiconductor maker.
And it’s recent $15 billion deal for rival chip maker Altera Corporation (NASDAQ:ALTR), underscores that point. This is one more move INTC is making to build out its Internet of Things (IoT) presence.
Smart phones are just the beginning. INTC missed out on the mobile phone wave, but it’s now actively moving into the next iteration; IoT, or the age of smart everything.
It’s becoming particularly obvious in new cars. There are sensors that tell you when you’re tire pressure is low, or you’re lights are out; that enable Bluetooth connections and can tell you when a car is in your blind spot.
These new technologies are all powered by sensors and managed by chips.
What’s more, INTC also has been ramping up its new fabrication plant in Vietnam to serve growing Asian markets. It could be the biggest fabrication plant in the world in the next few years.
7 Big Tech Stocks Worth Your Attention: Facebook Inc (FB)
The only time Facebook Inc (NASDAQ:FB) looked like it may not be able to live up to the hype was its first year after going public. FB stock soared on its first day only to sink and flounder for months.
But then it was off to the races. The stock is up about 200% from its 2013 lows.
It has adjusted to high expectations for such a new concept business as social media. But its recent purchase of Instagram was a very smart move.
While older users continue to swell the ranks of Facebook, younger social media users were looking to migrate to something that was even quicker and easier than posting on Facebook. Instagram was it. Snap a picture, share it with the world, or just your friends.
This new platform was timed perfectly for the the smartphone boom and the complete integration of phones and cameras. FB is also committed to turning its Messenger app into an AAPL killer in years to come.
7 Big Tech Stocks Worth Your Attention: China Mobile Ltd. (CHL)
The fact that the nation’s economy, even when slow, is growing at a 7% clip while the U.S. economy can barely stay positive, means there is serious growth and opportunity in the Chinese market.
The trick is to stay simple for now and buy quality.
So instead of diving in to Internet companies, look to telecom for now. And the best of the bunch is China Moble Ltd. (ADR) (NYSE:CHL).
CHL has a customer base of 807 million users, with 90 million of those on its recently launched 4G network. Last year CHL grew its subscriber base 5%.
As China’s middle class grows, one of the first places consumers will spend their growing incomes will be phone upgrades, new packages and data plans. That’s evident in the numbers: average data use per handset more than doubled between 2013 and 2014; and 4G data usage is starting out almost seven times higher than 3G use.
That means growing bandwidth is increasing content services demand on the system, which means more money for CHL from content providers.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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