The pandemic has certainly been kind to almost all the tech stocks across numerous sectors. The Nasdaq 100 is up 21% year-to-date, which is a solid return. But in the past 12 months, the Nasdaq 100 has risen 41%.
Granted, various sectors have fared better than others, but once a run begins in a sector, individual and institutional investors start to take notice. They begin buying deeper into the sector, looking for the next spot for growth.
The tech stocks here have easily outperformed the broader average. And they’re focused enough and small enough to really take advantage of the next leg of the tech stock run.
Some of the tech stocks are familiar to consumers and investors. Others are behind-the-scene players that will big beneficiaries from the current semiconductor production backlog of advanced semiconductors.
Either way, they’re good stocks worth some investment capital now. Oh, and by the way, each of these tech stocks to buy has an A-rating in my Portfolio Grader.
- ASE Technology (NYSE:ASX)
- Fortinet (NASDAQ:FTNT)
- Himax Technologies (NASDAQ:HIMX)
- Keysight Technologies (NYSE:KEYS)
- SiTime (NASDAQ:SITM)
- Sonos (NASDAQ:SONO)
- United Microelectronics (NYSE:UMC)
Tech Stocks to Buy: ASE Technology (ASX)
During the past 18 months the disruption from the shut down of semiconductor production around the globe has continued to snarl economic recovery. The backlog is huge and now that more devices have become “smart,” the demand isn’t going to give foundries and outsourced semiconductor assembly and test (OSAT) companies much breathing room.
ASX is a leading OSAT company headquartered in Taiwan. That means it’s a neighbor of some of the largest semiconductor foundries in the world. This kind of synergy is crucial for production of integrated circuits and testing them for their customers like mobile phone makers, cloud companies, telecoms and others.
The stock is up 52% year-to-date. However, unlike some of its chipmaking compatriots, it’s still a bargain. ASX is trading at a current price-to-earnings ratio of 15x and it still has a dividend yield of 2.4%.
As tech takes over the world, the first thing people think about is functionality. How it works and what it does.
But the second thing is security.
It doesn’t matter how great new software is, or how well something interfaces with other programs or networks or cloud server farms if it doesn’t protect customers and the enterprises running the software.
FTNT is entering its third decade in cybersecurity solutions, including firewalls. And with the rise in ransomware attacks that continue in 2021, FTNT, like other top cybersecurity tech stocks, is getting a lot attention.
Its Q2 numbers were announced in early August and they were very impressive. FTNT also revised its guidance higher for the rest of the year.
This all explains why the stock is up nearly 1106% year-to-date. But the fact is, FTNT still has plenty left in the tank, even at these levels.
Tech Stocks to Buy: Himax Technologies (HIMX)
Another Taiwan-based chip company, HIMX focuses on display image processor technologies. Basically that means chips and circuits that render an image digitally so it can be processed and manipulated digitally.
Think of it as a digital camera, but it’s also involved in things like robotic vision, medical imaging and virtual reality applications. The possibilities are immense, particularly given the rise in autonomous vehicles and visualizing Big Data.
HIMX is a “fabless” chipmaker. That means it doesn’t fabricate or build the chips but designs them and then uses a foundry to build them. Most modern chipmakers are fabless at this point.
HIMX is one of the smaller tech stocks on this list with a market cap below $2 billion, but it’s performing like a champ. The stock is up nearly 60% year-to-date yet still has a current P/E below 10x and provides 2.2% dividend.
Keysight Technologies (KEYS)
When you’re speaking of the tech stocks boom, you can’t speak of rising demand in chips and tech hardware without talking about the testing equipment and software companies that make sure all these devices function properly.
That’s precisely what KEYS does. It was once a division inside a leading computer company. It was then purchased by a leading network and telecoms company. Finally, it was spun out on its own in 2014.
The point is that industry players know the kind of quality work KEYS does. Now that it’s open for business with multiple clients, it has become very popular.
KEYS currently carries a respectable $33 billion market cap and the stock is up 35% year-to-date. Demand for its services and products should continue to ramp up as chip production comes back online.
Tech Stocks to Buy: SiTime Corp (SITM)
Tech stocks usually follow pretty basic categories that we’re used to thinking about. Whether its hardware-based companies that make chips and phones and other devices, or software companies that build out the programs that the devices run.
But one segment that we rarely think about is time. Just like in music, time is essential to the operation of all our technology. Processors run on time and like a metronome, time is crucial to the functionality of all tech equipment, and ultimately, tech stocks.
SITM has developed a new way to deliver time, beyond the current industry standard using quartz devices. It’s using silicon timing solutions which also allow for more flexibility in timing solutions as well as less power-hungry clocks.
Launched in 2005, SITM is now entering the world of credible tech stocks. It has a $4 billion market cap and the stock is up 100% year-to-date. As server farms and enterprises begin to update their equipment and new mobile devices roll out, demand will continue to grow.
Usually, the tech stocks I feature in articles like this are industry players that form the infrastructure of the tech sector’s expanding influence. But on rare occasions a consumer tech stock enters the mix, like SONO.
The company has been a leader in multi-room wireless sound systems for nearly 20 years now. But in the last decade it has become a major force in the marketplace.
No one likes wires. And as mobile technology developed, it seemed that home stereos and theaters were still stuck with wires running to-and-fro, snaked through walls, etc. SONO was always a quality standard for wireless speaker solutions, but it was selling to the early adopter market at premium prices. Now it can expand its offerings to more consumers at various price points.
SONO’s market cap was also boosted during the pandemic as more people upgraded their home offices and entertainment options. It’s approaching a $5 billion market cap, as the stock has risen nearly 60% year-to-date. Expect SONO to grab more market share moving forward.
Tech Stocks to Buy: United Microelectronics (UMC)
A spinoff from Taiwan’s famous Industrial Technology Research Institute in 1980, UMC was the country’s first semiconductor company. Today, it’s one of the top three foundries based in Taiwan.
UMC doesn’t make as many headlines as other tech stocks, but it’s a key player in building out the newest chips for every manner of industry. As more of our lives become digitized in some way, shape, or form, UMC is one of a handful of companies that make the designs for new chip sets become reality.
And its unique position between the U.S. tech community and the Chinese one means UMC is at the center of the world’s demand.
UMC stock is up 49% year-to-date, and more than 3x that in the past 12 months. And this is just the beginning.
On the date of publication, Louis Navellier has positions in FTNT, HIMX, SITM and UMC in this article. Louis Navellier does not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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