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The technology sector is made up of companies that operate in the semiconductor, artificial intelligence (AI), software, computer hardware, and other industries related to information technology. This sector includes some of the world’s most well-known and largest companies, such as Microsoft, Google, Amazon, and Nvidia.
Stocks in the tech sector, which are holistically represented by the Invesco S&P 500® Equal Weight Tech ETF (RYT), have gone down with the rest of the market as RYT has provided investors with a return of -18% over the past 12 months.
Here are the top technology stocks with the highest growth, greatest value, strongest momentum, and most searches on Google.
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Overview: Tech Stocks
From 2007 to 2017, the tech industry zoomed from $65.2 billion to $263.6 billion. However, this phenomenal growth in the tech sector doesn’t come without risks. Innovations constantly cause disruptions within the market. For example, in 2007, the introduction of the iPhone created many new businesses and ruined others. It caused the tech industry to evolve into what it is today.
This sector offers more than just sturdy mega-cap stocks and household brands like Amazon. The tech sector niche includes companies of all sizes, including start-ups. You must do your research to successfully invest in tech stocks.
Best Online Brokers for Tech Stock
A good online broker can make investing and trading tech stocks more efficient and can help you be more successful. Here are some great online brokers you should consider.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.
- Active traders
- Derivatives traders
- Retirement savers
- Sophisticated trading platforms
- Wide range of tradable assets
- Exceptional customer service
- Limited currency trading
- Higher margin rates than competitors
- No paper trading on its standard platform
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.
- Intermediate to Advanced traders
- High-volume traders
- Momentum traders
- Short sellers
- Unrivaled access to short inventory
- Flexible order routing for improved executions
- Discounts for active traders
- Advanced platform with fast executions
- Reliable customer service
- Not designed for beginner or low-volume traders
Features to Look for in Tech Stocks
- Profitability: Hands down, the best way to determine whether you should buy a particular stock is to get a firm grasp on whether it can turn a profit. Look at its profitability ratios to find out how it stacks up.
- Total addressable market (TAM): The total addressable market (TAM) reveals the maximum amount of money a company can earn in a select market — provided a company has 100% of the market share.
When a company is in the process of releasing a new product, a new customer segment or plans to cross-sell an existing product to customers, you want to evaluate the company’s potential growth capacity.
- Revenue: Look at a company’s operating revenue and nonoperating revenue and what tech companies make from their core business (operating revenue) and one-time business activities (nonoperating revenue). You’ll want to carefully consider both before you pull the trigger on a tech stock.
Putting Tech Stocks in Perspective
The technology sector can attract you with its stability and growth potential. Investigate tech stocks’ potential to expose you to lucrative returns.
Frequently Asked Questions
Are tech stocks a good investment?
Tech stocks add more risk to ones portfolio, however, this risk can come along with high returns. Keep in mind tech stocks may be more volatile in a bear market.