The best-performing technology stocks for the third quarter include Diebold Nixdorf Inc., Applied Optoelectronics Inc., and Super Micro Computer Inc., each of which has at least nearly quadrupled in value in the last year.
An exchange-traded fund (ETF) that serves as a benchmark for the broader tech sector is the Technology Select Sector SPDR Fund (XLK). XLK has risen 23% in the last year while the Russell 1000 Index has climbed by about 9%.
Below is a closer look at the top tech stocks for the quarter by best value, fastest growth, and most momentum each. Figures above are as of Aug. 28, while data below is as of Aug. 16.
Best Value Tech Stocks
Investors following a value investing strategy buy stocks they believe are trading for less than they are intrinsically worth, with the goal being that the prices of those stocks rise faster than others as the market corrects this discrepancy.
One way to assess whether a company is undervalued is to look at a fundamental business metric like the price-to-earnings (P/E) ratio. The lower the P/E ratio, the thinking goes, the better the value of the stock is. Below we look at the tech stocks with the lowest 12-month trailing P/E ratios.
|Best Value Tech Stocks|
|Price ($)||Market Capitalization (Market Cap) ($B)||12-Month Trailing P/E Ratio|
|Viasat Inc. (VSAT)||31.23||3.9||2.3|
|Daqo New Energy Corp. (DQ)||35.44||2.7||2.6|
|JinkoSolar Holding Co. Ltd. (JKS)||34.57||1.7||4.9|
|Nokia Oyj (NOK)||3.80||21.1||5.0|
|Avnet Inc. (AVT)||45.64||4.2||5.0|
- Viasat Inc.: This is a satellite broadband and networking services provider. Viasat’s stock price has plunged 30% in the last year, during time which the company’s operations were disrupted by a malfunctioning satellite.
- Daqo New Energy Corp.: It is a Chinese monocrystalline silicon and polysilicon manufacturer developing products for solar energy applications. Daqo shares have fallen by close to half in the last year as polysilicon prices have plunged.
- JinkoSolar Holding Co.: A Chinese solar power company that manufactures solar energy products, including silicon ingots and wafers, solar cells, and solar modules. Like Daqo above, JinkoSolar’s shares have dropped by more than half in the last year.
- Nokia Oyj: A Finnish networking infrastructure operator. Nokia’s shares have fallen about 20% in the last 12 months as the company missed earnings expectations and lowered full-year guidance.
- Avnet Inc.: This company provides supply-chain and logistics services, distribution, and design support for electronic components.
Fastest-Growing Tech Stocks
When considering growth stocks, both revenue and earnings-per-share (EPS) growth can be important factors in the success of a company. Ranking companies by one of these factors or the other, though, can lead to misrepresentations of the success of a firm as a result of one-time benefits, changes in tax law, or other scenarios.
In our growth model, we rank companies based on a 50/50 weighting of the most recent year-over-year (YOY) percentage growth for revenue and EPS. Companies with quarter growth in either category of more than 1,000% have been excluded as outliers.
|Fastest-Growing Tech Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Rumble Inc. (RUM)||7.09||2.0||N/A (see company description)||467.7|
|Aspen Technology Inc. (AZPN)||192.44||12.4||-62.8||171.7|
|BlackBerry Ltd. (BB.TO)||CA$6.05||CA$3.5||N/A (see company description)||137.4|
|Grab Holdings Inc. (GRAB)||3.40||13.2||N/A (see company description)||130.3|
|Canadian Solar Inc. (CSIQ)||32.11||2.1||750.0||36.1|
- Rumble Inc.: This company operates an online video platform and provides hosting and cloud services. It markets itself as “immune to cancel culture.” The company attributed its last-quarter revenue growth of almost 500% to its pool of content and “early maturation of advertising tools.” Net loss widened to about $29 million from about $4.7 million in the prior-year quarter, so the company doesn’t have an EPS growth figure above.
- Aspen Technology Inc.: A software company providing asset management services for the environmental industry.
- BlackBerry Ltd.: It is a Canadian cybersecurity company that previously developed a line of pagers, tablets, and smart devices. Strong performance in the company’s licensing business line helped to drive revenue growth in the last quarter. BlackBerry doesn’t have an EPS growth figure above because it posted net losses in the most recent quarter.
- Grab Holdings Inc.: A Singaporean superapp company providing mobility, delivery, and financial services, among other offerings.
- Canadian Solar Inc.: It designs, builds, and sells solar equipment for residential, commercial, and industrial customers.
Tech Stocks With the Most Momentum
Another factor-based investing strategy is momentum investing, in which investors target stocks whose prices have risen faster than others and than the market more broadly. These investors believe fast-rising stocks will typically continue to outperform because the factors leading to their growth are not likely to disappear immediately.
Some investors also target fast-growing stocks as a way of benefiting from previous outperformance. This helps to push the price of the stock even higher. Below are tech stocks with the highest total return for the past 12 months.
|Tech Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Diebold Nixdorf (DBD)||21.50||1.7||429.6|
|Applied Optoelectronics (AAOI)||14.79||0.5||417.1|
|Super Micro Computer (SMCI)||264.20||13.9||294.2|
|Innodata Inc. (INOD)||13.05||0.4||191.9|
|IonQ Inc. (IONQ)||15.56||3.2||144.7|
|Russell 1000 Index||N/A||N/A||9.2|
|Technology Select Sector SPDR Fund (XLK)||N/A||N/A||23.0|
- Diebold Nixdorf: It designs and builds point-of-sale (POS) terminals and self-service transaction systems like ATMs, as well as related software and services. The company emerged from financial restructuring related to Chapter 11 and Chapter 15 in August and was subsequently relisted on the New York Stock Exchange (NYSE).
- Applied Optoelectronics: This company provides diode lasers, photodiodes, and related modules. It also fabricates semiconductors. The company’s stock soared in early August as it beat earnings and revenue estimates.
- Super Micro Computer: Also known as Supermicro, it builds energy-efficient servers and storage systems. Supermicro shares have surged in recent months as it has become a leading server provider for artificial intelligence (AI) platforms.
- Innodata Inc.: A digital information management company providing business process, technology, and consulting services.
- IonQ Inc.: A quantum computing hardware and software company working to develop a general-purpose quantum computer. IonQ shares have jumped in recent months amid a broader rally in quantum computing stocks.
Advantages of Tech Stocks
Potential for growth: Technology stocks have tremendous potential for growth, although investors may have to pay a premium to receive it. As of Aug. 28, the technology sector traded at more than 43 times earnings, with sectorwide earnings expected to grow by 17% per year over the next several years.
Growth in the tech sector can be highly uneven. Small-cap and penny tech stocks may experience explosive growth when they achieve breakout success. Many larger companies have less room to grow. But tech is unique in that even some of the very largest firms, such as those that make up the original FANG group (Meta Platforms Inc. (META), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX), and Alphabet Inc. (GOOGL), still maintain the potential for significant growth. FANG stocks achieved roughly 25% returns over the last 10 years.
Cutting-edge innovation: Tech stocks are largely at the forefront of technological innovation. By investing in these companies, investors not only stand to benefit from game-changing technologies, but they also support the growth of this industry.
Drawbacks of Tech Stocks
Not infallible: Although it is tempting to think of tech stocks as experiencing a one-way ticket toward significant growth, this is not the reality of the sector. In 2022, for instance, the sector significantly underperformed the overall market as firms grappled with the impact of a post-COVID world and supply shortages, with even major players like Apple and Alphabet falling by 27% and 39%, respectively. The significant gains in the sector over much of its history can lull investors into a false sense of security, but tech is susceptible to volatility in the same way as any other sector.
Shifting landscape: For investors who aren’t experts in the technology of the companies from which they’re selecting, the constantly-shifting landscape of the tech sector can represent an added risk. Often, those who aren’t highly aware of changes in the tech landscape may arrive to a new trend or development too late to maximize returns on an investment.
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As of the date this article was written, the author does not own any of the stocks listed above.