Top Tech Stocks Yield Over 300% Returns

Technology stocks have the potential for significant gains, and investors are frequently willing to pay more for the promise of future growth.

The best-performing tech stocks this month include Tingo Group Inc., Super Micro Computer Inc., and Aehr Test Systems, which have all given investors returns of more than 300% over the previous 12 months.

A benchmark for tech stocks, the Technology Select Sector SPDR Fund (XLK), has increased by about 20% over the past year, outperforming the overall market as interest in artificial intelligence has grown. During that time, the Russell 1000 Index increased by about 4%.

We examine the best value, the fastest growth, and the most momentum among the top tech stocks. All data below are as of June 4, and the benchmark figures above are as of June 5.

Best Value Tech Stocks

Value investing is a factor-based investment strategy that entails selecting stocks that you think are undervalued compared to their intrinsic value, typically by evaluating the stock’s price in relation to one or more key business metrics. Price-to-earnings (P/E) ratio is an accepted measure of value.

According to value investors, if a company is undervalued in relation to its intrinsic value (in this case, as determined by its P/E ratio), its stock price may increase more quickly than that of its competitors as the price catches up to the company’s value.

Daqo New Energy Corp.:

A Chinese company called Daqo makes polycrystalline and monocrystalline silicon products, most of which are used in solar energy applications. Amid reports that the price growth of its polysilicon has slowed, Daqo’s shares have decreased by about 39% over the past year.

Tingo Inc.:

Agri-fintech firm Tingo offers a smartphone platform that enables farmers to manage their commercial activities. Customers primarily from Africa are served.

Additionally, it is traded on the Nasdaq under the symbol TIO. Following a claim by short-seller Hindenburg Research that Tingo Group was “an exceptionally obvious scam,” the company’s stock fell 80% on June 6. In response, the company referred to the report as “misleading and libellous.”

Viasat Inc.:

High-speed satellite broadband and networking services are offered by Viasat.

Avnet Inc.:

Avnet offers distribution, design assistance, and supply chain and logistics services for electronic components. Over the past year, Avnet shares have decreased by more than 9% as supply chain problems affected the larger semiconductor industry.

Nokia Oyj:

Nokia is a provider of networking infrastructure with a base in Finland.

Fastest-Growing Tech Stocks

The top tech stocks are ranked based on a 50/50 weighting of revenue growth and earnings-per-share growth. Companies with a quarterly EPS or revenue growth of more than 1,000% are excluded as outliers. Both sales and earnings are critical factors in a company’s success.

Canadian Solar Inc.:

For customers in the residential, commercial, and industrial sectors, Canadian Solar designs, manufactures, and sells solar equipment. Modules, inverters, and system kits for solar energy are among the company’s offerings. For the most recent quarter, Canadian Solar’s revenue increased by more than a third thanks to growth in its solar module and storage manufacturing unit.

Gen Digital Inc.:

Gen Digital is a provider of cybersecurity products and services. Its merger with Avast, which was completed in September 2022, contributed in part to its EPS and revenue increases in the most recent quarter.

ZoomInfo Technologies Inc.:

A cloud-based sales and marketing platform provided by ZoomInfo enables users to get in touch with their target market. In the first quarter, ZoomInfo’s EPS and revenue increased significantly as it incorporated generative artificial intelligence (AI) into several products.

Shoals Technologies Group Inc.:

Shoals offers services for electrical system balance. It supports infrastructure projects for solar, energy storage, and electric vehicle charging. In the first quarter of the year, revenue at its System Solutions division nearly doubled, driving overall company revenue and earnings higher.

SolarEdge Technologies Inc.:

SolarEdge Technologies builds and distributes equipment and technology for photovoltaic arrays. In addition, the company provides optimization services as well as monitoring solutions for photovoltaic systems.

Tech Stocks With the Most Momentum

Momentum investing is a factor-based investing strategy that involves investing in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear.

In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock up further. These are the tech stocks that had the highest total return over the past 12 months.

Super Micro Computer Inc.:

Super Micro Computer, also known as Supermicro, creates power-saving servers and storage systems and offers global support. In recent months, Supermicro’s stock has soared as a result of its emergence as a key supplier of servers for AI platforms.

Aehr Test Systems:

Aehr is a business based in California that provides systems for screening semiconductor chips. Most recently, the company’s stock increased after it disclosed a new semiconductor customer order.

Bel Fuse Inc.:

Bel Fuse produces and sells electronic parts for use in a variety of industries, including the aerospace, defence, telecommunication, computing, and transportation sectors. As the company’s earnings results have improved over several quarters, Bel Fuse shares have increased over the past year.

First Solar Inc.:

First Solar designs and manufactures photovoltaic solar power systems and solar modules.

Rambus Inc.:

A fabless semiconductor business called Rambus creates and markets memory chips for use in data centres.

Rambus stock has increased consistently since July 2022, but it really took off in early 2023 as anticipation for AI and the necessary computing power drove semiconductor stock higher.

The Impact of Inflation on Technology Stocks

Historically, during times of rising inflation, technology stocks have lagged behind other sectors. In contrast, the group typically outperforms the overall market when inflation is on the decline.

For instance, the annualised 1.7% inflation rate between 2009 and 2021 coincided with the technology bull market.

The tech industry did, however, lead overall market declines in 2022 due to rising inflation, which in June of last year hit a 40-year high of 9.1%.

Why are technology stocks so sensitive to inflation?

Interest rates are central to everything. The Federal Reserve will probably raise its federal funds rate to reduce demand as a result of rising inflation.

Higher rates have two effects on technology companies. First, there will be less money available for businesses and consumers to spend on goods and services, which will slow corporate earnings. Second, technology companies borrow a lot of money to pay for startup costs, patents, and innovation costs. As interest rates rise, the cost of servicing this debt rises.

The opposite happens when inflation declines. The Fed will likely lower interest rates then, which spurs consumer demand and reduces technology companies’ borrowing costs.

Advantages of Technology Stocks

Investing in Innovation:

By purchasing shares of technology companies, investors can support ground-breaking concepts with the potential to enhance people’s lives.

Whether it’s Apple Inc. (AAPL) with a new health feature for its watch or a startup developing a game-changing semiconductor for the automotive industry, technology companies of all sizes continue to push the envelope in their quest to be the first to market with game-changing technology.

Growth Potential: