10 Unstoppable Tech Stocks To Buy
In this article, we discuss the 10 unstoppable tech stocks to buy. To skip the detailed analysis of the technology industry, go directly to the 5 Unstoppable Tech Stocks To Buy.
The technology sector experienced significant growth in 2023 after a disastrous preceding year. Over the last year, the tech-heavy Nasdaq has been up 33.78% compared to the S&P 500’s 25.84% gains at the time of writing on April 4. The industry ETFs have also received significant attention from investors. The growing trajectory of artificial intelligence (AI) significantly propelled the performance of VanEck Semiconductor ETF (SMH), iShares U.S. Technology ETF (IYW), and Vanguard Information Technology Index Fund ETF Shares (VGT) have become some of the best-performing ETFs in the market. iShares U.S. Technology ETF (IYW) and Vanguard Information Technology Index Fund ETF Shares (VGT) have realized gains of 45.31% and 35.52% over the last twelve months, as of April 4, respectively. While these two ETFs are mostly moving in line with the broader market since the start of the year, VanEck Semiconductor ETF (SMH) seems to be an unstoppable tech ETF that has gained 73.72% over the last twelve months and 30.14% year-to-date, compared to S&P 500’s 8.53% YTD gains, as of April 4.
Beneficiaries of the AI Trend
Adobe Inc. (NASDAQ:ADBE) is one of the top names that are set to benefit from the AI revolution. The company’s AI offerings include Firefly, Adobe Express, Lightroom, and several others. At Adobe Summit 2024, held between March 25 and 28, the company revealed a range of groundbreaking innovations aimed at revolutionizing how enterprises deliver personalized experiences at scale. The company introduced Adobe Experience Platform AI Assistant, which aims to streamline tasks and provide insights through a conversational interface. Adobe Inc.’s (NASDAQ:ADBE) new offering, GenStudio, is a content creation and management platform that uses generative AI to plan, create, manage, activate, and measure on-brand content for marketing teams. The platform allows marketing teams to produce high-quality, personalized content at scale. Anil Chakravarthy, President, Digital Experience Business at the company said:
"Generative AI enables a fundamental shift in the relationship between brands and their customers, creating a transformative moment for business leaders to drive profitable growth while delivering new digital experiences”
He further added:
"The ability to personalize every interaction has become the key growth driver in Customer Experience Management for enterprises around the world, and Adobe is leading the way in making this a reality with powerful generative AI deeply integrated into existing workflows."
Adobe Inc. (NASDAQ:ADBE) reported its first quarter 2024 earnings on March 14 and registered double-digit revenue growth at $5.18 billion, up 11% year-over-year. The company’s net income declined by 50% year-over-year to $620 million and was mostly affected by the termination of the Figma deal. On September 15, 2023, Adobe Inc. (NASDAQ:ADBE) announced its plan to acquire the software developer Figma Inc. for $20 billion. The deal fell through as it was blocked by the European Commission and the UK Competition and Markets Authority, and Adobe Inc. (NASDAQ:ADBE) had to pay Figma a $1 billion termination fee. At its Q1 2024 earnings call, the company’s CFO, Daniel J. Durn, said that the payment has caused the company’s GAAP EPS to come in $2.19 lower, and this will affect the full-year EPS as well.
The advanced computing power required for AI is a significant growth catalyst for semiconductor companies. While most of the semiconductor industry depends on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) for chip manufacturing, Intel Corporation (NASDAQ:INTC) hopes to compete with the company in the near future. The company’s foundry business reported operating losses of $7 billion in 2023 on an $18.9 billion revenue. The company expects its foundry to reach profitability somewhere at the mid-point of 2023 and 2030. Nevertheless, disruptive technologies such as AI, autonomous driving, and electric vehicles are expected to drive the chip demand much higher over the next few years, which makes a bull case for Intel Corporation (NASDAQ:INTC). The company is aiming to become the second largest external foundry by 2030 as the company’s CEO, Pat Gelsinger, made the following comments at the company’s Q4 2023 earnings call:
“While our ambitions will not materialize overnight, we made tremendous progress in both Q4 and fiscal year '23 toward our goal of becoming the second-largest external foundry by 2030. The rapid adoption of AI by all industries is proving to be a significant tailwind for IFS as high-performance compute, an area where we have considerable wafer and packaging know-how and IP is now one of the largest and fastest-growing segments of the semiconductor market. We made major strides in building our foundry ecosystem in 2023 with now over 40 strategic agreements across EDA design services, IP, cloud, and U.S. military aerospace and government.
Critical agreements with ARM and Synopsys continue to gain momentum. We delivered the Intel 18A 0.9 PDK and broadened its availability in Q4. We expanded the RAMP-C program significantly and just this quarter signed a major foundry contract with the United States government and Department of Defense. We are also very pleased to have completed a major agreement with United Microelectronics, or UMC, to develop a 12-nanometer process platform targeting high-growth markets, including mobile, communication infrastructure, and networking.
This expands both Intel and UMC's foundry process portfolios and customer access to a broader and more resilient supply leveraging our Arizona site. This agreement builds upon and furthers our long and deep relationships with the vibrant Taiwan ecosystem. This also meaningfully extends the production life of our installed capacity and improves our returns on investments, similar to the announcement last quarter of our Tower Semiconductor partnership at the 65-nanometer node with our New Mexico site. Our success with IFS will be measured by customer commitments and revenue.”
The technology sector has been the recent market winner and seems to have tons of growth potential in the long term as well. Keeping that in mind, some unstoppable tech stocks to buy include Super Micro Computer, Inc. (NASDAQ:SMCI), MicroStrategy Incorporated (NASDAQ:MSTR), and AppLovin Corporation (NASDAQ:APP).
Photo by Pascal Bernardon on Unsplash
Our Methodology
For this article, we used the Finviz stock screener to identify large to mega-cap technology stocks with year-to-date gains of over 35%, as of April 4. Out of the 13 stocks we found, we chose the 10 stocks with the best performance and listed them in ascending order of their YTD gains.
We also added the hedge fund sentiment around each stock. The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds as of the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
10 Unstoppable Tech Stocks To Buy
10. Western Digital Corporation (NASDAQ:WDC)
YTD Gains as of April 4: 38.69%
Number of Hedge Fund Holders: 56
Western Digital Corporation (NASDAQ:WDC) is a developer, manufacturer, and seller of data storage devices and solutions. The company sells its products under different brands, namely Western Digital, WD, SanDisk, and G-Technology. As of April 4, the stock is up by 38.69% year-to-date (YTD).
In Q4 of 2023, hedge fund sentiment was positive toward Western Digital Corporation (NASDAQ:WDC) as 56 hedge funds had investments in the stock, with positions worth $3.163 billion. This is compared to 44 funds with positions worth $1.892 billion in the preceding quarter. Israel Englander’s Millennium Management has increased its stake in the company by 60% to 10.48 million shares worth $549 million and is the most significant shareholder as of the fourth quarter of 2023.
On March 27, Evercore ISI initiated coverage of Western Digital Corporation (NASDAQ:WDC) with an Outperform rating and a $80 price target. According to Evercore, the company is “uniquely positioned to outperform given a host of tailwinds”.
Western Digital Corporation (NASDAQ:WDC) has caught the attention of institutional investors, along with Super Micro Computer, Inc. (NASDAQ:SMCI), MicroStrategy Incorporated (NASDAQ:MSTR), and AppLovin Corporation (NASDAQ:APP).
9. Nutanix, Inc. (NASDAQ:NTNX)
YTD Gains as of April 4: 39.06%
Number of Hedge Fund Holders: 48
Nutanix, Inc. (NASDAQ:NTNX) is a California-based company that provides enterprise cloud platforms. The company’s products include Acropolis Hypervisor, Nutanix Kubernetes Engine, Nutanix Cloud Management, and others.
Based on 10 Wall Street analysts’ ratings over the past three months, Nutanix, Inc. (NASDAQ:NTNX) has a consensus rating of Strong Buy. The average price target of $68.73 implies an upside of 7.79% from the last price of $63.76, as of April 4. The stock has gained 39.06% YTD, as of April 4.
In Q4 of 2023, Nutanix, Inc. (NASDAQ:NTNX) was part of 48 hedge funds’ portfolios, and the total stake value was $2 billion. This is compared to 43 funds in the previous quarter with a total stake of $1.328 billion. As of Q4 2023, Generation Investment Management is the top shareholder in the company and has a position worth $823.014 million.
Carillon Chartwell Small Cap Value Fund made the following comment about Nutanix, Inc. (NASDAQ:NTNX) in its Q3 2023 investor letter:
“Within the Carillon Chartwell Small Cap Growth Fund, information technology and industrials were the strongest-performing sectors, with strong stock selection leading to alpha generation. The new management team at Nutanix, Inc. (NASDAQ:NTNX) continues to execute well, delivering another positive quarterly earnings surprise. Nutanix’s core hyperconverged infrastructure (HCI) technology continues to gain market share over its competitors.”
8. Micron Technology, Inc. (NASDAQ:MU)
YTD Gains as of April 4: 50.70%
Number of Hedge Fund Holders: 92
Micron Technology, Inc. (NASDAQ:MU) is a designer, developer, manufacturer, and seller of memory and storage products. The company has 17 manufacturing sites, 12 customer labs, and 17 locations all over the world.
In the fourth quarter of 2023, 92 hedge funds held positions in Micron Technology, Inc. (NASDAQ:MU) worth $6.06 billion. As of the fourth quarter of 2023, Ken Griffin’s Citadel Investment Group is the top investor in the company and has a position worth $604.047 million.
On March 20, Micron Technology, Inc. (NASDAQ:MU) announced a quarterly dividend of $0.115, payable by April 16 to the shareholders of record on April 1. As of April 4, the stock has a dividend yield of 0.37%.
As of April 4, the stock is 50.70% higher YTD and is 8th on our list of unstoppable tech stocks to buy. On March 26, Mizuho analyst Vijay Rakesh raised the price target on Micron Technology, Inc. (NASDAQ:MU) to $130 from $124 and maintained a Buy rating on the shares.
7. Pure Storage, Inc. (NYSE:PSTG)
YTD Gains as of April 4: 51.09%
Number of Hedge Fund Holders: 37
Pure Storage, Inc. (NYSE:PSTG) is a California-based company that offers data storage products, technologies, and services. The company’s products include FlashArray, FlashBlade, Portworx, etc. As of April 4, Pure Storage, Inc. (NYSE:PSTG) has gained 51.09% YTD.
16 Wall Street analysts have covered Pure Storage, Inc. (NYSE:PSTG) in the last three months, and 13 keep a Buy-equivalent rating on the stock. The average price target of $54.19 represents an upside of 4.23% from present levels, as of April 4.
In the fourth quarter of 2023, 37 hedge funds held positions in Pure Storage, Inc. (NYSE:PSTG), with positions worth $926.236 million. With 5.49 million shares worth $195.923 million, Atreides Management is the largest shareholder in the company, as of December 31, 2023.
6. Dell Technologies Inc. (NYSE:DELL)
YTD Gains as of April 4: 70.02%
Number of Hedge Fund Holders: 56
Dell Technologies Inc. (NYSE:DELL) is involved in the designing, development, and sale of information technology hardware, software, and service solutions. The company operates through two segments, namely Infrastructure Solutions Group and Client Solutions Group. As of April 4, the stock has gained 70.02% YTD.
In Q4 of 2023, 56 hedge funds held positions in Dell Technologies Inc. (NYSE:DELL), and their stakes amounted to $2.810 billion. This is compared to 53 funds in Q3, with positions worth $1.802 billion. As of December 31, 2023, Alkeon Capital Management is the most significant shareholder in the company and has a position worth $382.614 million.
On March 4, Dell Technologies Inc. (NYSE:DELL) increased its quarterly dividend by 20.3% to $0.445, payable by May 3 to the shareholders of record on April 23. The stock has a dividend yield of 1.40%, as of April 4.
Super Micro Computer, Inc. (NASDAQ:SMCI), MicroStrategy Incorporated (NASDAQ:MSTR), and AppLovin Corporation (NASDAQ:APP) are some of the top unstoppable tech stocks to buy, in addition to Dell Technologies Inc. (NYSE:DELL).
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Disclosure. None. 10 Unstoppable Tech Stocks To Buy is originally published on Insider Monkey.