NLOK, COHR, and ENPH are top for value, growth, and momentum, respectively
By Matthew Johnston Updated Dec 21, 2020
The technology sector is comprised of businesses that sell goods and services in electronics, software, computers, artificial intelligence, and other industries related to information technology (IT). The sector includes companies with the largest market capitalizations in the world such as Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN).
Tech stocks, represented by the Technology Select Sector SPDR ETF (XLK), have outperformed the broader market. XLK has provided investors with a total return of 43.3%, more than double the Russell 1000’s total return of 20.6% over the past 12 months, as of December 16, 2020.1 All statistics in the tables below are as of December 17.
Here are the top 3 tech stocks with the best value, the fastest growth, and the most momentum.
Best Value Tech Stocks
These are the tech stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
| Best Value Tech Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| NortonLifeLock Inc. (NLOK) | 20.38 | 12.1 | 4.0 |
| Xerox Holdings Corp. (XRX) | 23.03 | 4.6 | 5.6 |
| Synnex Corp. (SNX) | 82.93 | 4.3 | 8.8 |
Source: YCharts
- NortonLifeLock Inc.: NortonLifeLock is in the consumer cyber safety business, offering solutions that enable consumers to protect their electronic devices, online privacy, identity, and home networks. The company announced in early December that it was acquiring Avira from Investcorp Technology Partners for approximately $360 million. Avira provides cybersecurity and privacy solutions to customers in Europe and key emerging markets.2
- Xerox Holdings Corp.: Xerox offers digital print technology and related solutions. The company’s capabilities include imaging and printing, data analytics, as well as the development of secure and automated solutions to improve productivity. Xerox announced in the first half of December the appointment of Xavier Heiss as chief financial officer (CFO), a role he has served in on an interim basis since the end of September. Prior to serving as interim CFO, Heiss led the company’s EMEA Operations as executive vice president and president.3
- Synnex Corp.: Synnex is a provider of IT supply chain services. It offers a range of distribution, logistics, and integration services to the technology industry. The company announced in early December that it had completed its previously announced spinoff of Concentrix Corp., whose common stock is now listed on the Nasdaq under the symbol “CNXC“.4
Fastest Growing Tech Stocks
These are the tech stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
| Fastest Growing Tech Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | |
| Coherent Inc. (COHR) | 140.62 | 3.4 | 966.7 |
| Qualcomm Inc. (QCOM) | 149.74 | 169.4 | 514.3 |
| First Solar Inc. (FSLR) | 91.77 | 9.7 | 400.0 |
Source: YCharts
- Coherent Inc.: Coherent manufactures laser-based photonics products, which are used in manufacturing and instrumentation applications such as optical telecommunication, semiconductor manufacturing, advance packaging, and more.
- Qualcomm Inc.: Qualcomm is a multinational semiconductor and telecommunications equipment company. It develops digital wireless communications products and services and is engaged in the expansion of 5G technology. Qualcomm reported its full-year results on November 4 for fiscal year (FY) 2020, which ended September 27, 2020. Annual net income rose 18.5% despite a 3.1% decline in annual revenue. Net income was boosted by a significantly lower income tax expense compared to FY 2019. The company said that the global spread of COVID-19 had a negative impact on consumer demand for devices that use its products and intellectual property, hurting its results for the year.5
- First Solar Inc.: First Solar designs and manufactures solar power systems and solar modules. The company utilizes a thin film semiconductor technology to manufacture electricity-producing solar modules.
Tech Stocks with the Most Momentum
These are the tech stocks that had the highest total return over the last 12 months.
| Tech Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Enphase Energy Inc. (ENPH) | 163.31 | 20.6 | 534.0 |
| Fastly Inc. (FSLY) | 95.15 | 10.8 | 380.8 |
| Cloudflare Inc. (NET) | 81.81 | 25.1 | 345.3 |
| Russell 1000 | N/A | N/A | 20.6 |
| Technology Select Sector SPDR ETF (XLK) | N/A | N/A | 43.3 |
Source: YCharts
- Enphase Energy Inc.: Enphase Energy provides solar energy cells and monitoring equipment for distributors, large installers, original equipment manufacturers, strategic partners, and homeowners.
- Fastly Inc.: Fastly is a provider of cloud-computing services. The company also offers image optimization, security, edge computer technology, streaming solutions, and more. The company announced in October that it had completed its acquisition of Signal Sciences, a provider of web application and API security solutions.6 Fastly agreed to acquire Signal Sciences for approximately $775 million at the end of August.7
- Cloudflare Inc.: Cloudflare is primarily an Internet security company. It provides a global cloud platform that offers a range of network services, including reliability, advanced security, video streaming and delivery, and domain registration.