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5 Tech Stocks That Have Returned More Than 100% in 2023
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Technology stocks have had a major bounce back in 2023, as evidenced by a rally of 44.03% in the tech-heavy Nasdaq composite in the year-to-date period. Further, the Technology Select Sector SPDR ETF has risen 55% in the same time frame, outperforming the S&P 500 index’s return of 25.1%.
The primary reason behind such returns is the normalization of supply-chain disruptions, which have taken a toll on the tech sector in the past few years.
Also, cooling inflationary pressure and the optimism that the Federal Reserve is close to ending the rate hike cycle drove growth in the sector. The Fed has held interest rates unchanged at 5.25% to 5.5% for the third successive meeting. It has also signaled three rate cuts in 2024, with further rate cuts expected in 2025 as inflation cools down.
Advanced Technologies: A Key Catalyst
Apart from macro tailwinds, having large as well as small tech companies making concerted efforts toward bolstering their Artificial Intelligence (AI), Machine Learning (ML) and cloud computing capabilities remained a major upside.
2023 also witnessed huge success with generative AI technology worldwide due to the growing adoption of chatbots, especially ChatGPT by Microsoft-backed OpenAI.
The emergence of large language models (LLM) and their increasing use cases have been a plus. Tech giants like Microsoft, Alphabet’s Google, Amazon and Meta Platforms (META - Free Report) are continuously putting strong efforts to boost the capabilities of their respective LLMs. In regard to this, the introduction of Amazon Bedrock and Google’s Gemini remains noteworthy.
The growing proliferation of blockchain technology, IoT, AR/VR, autonomous vehicles, wearables, connected devices and cryptocurrency have been driving growth in the semiconductor industry, which is the building block of the underlined sector. Increasing user engagement on social media platforms has been another positive.
In addition, rising IT spending has been contributing well to the performance of the technology sector. It is expected to hit $5.1 trillion in 2024, indicating growth of 8% year over year per Gartner.
Given this upbeat scenario, we advise investors who are looking for good investment opportunities in 2024 to park their money in technology stocks with strong growth potential.
With the help of the Zacks Stock Screener, we have selected the abovementioned five tech stocks that have returned more than 100% in 2023 and are well-poised to grow throughout 2024 as these are highly reputed, fundamentally strong and financially resilient.
Per Zacks’ proprietary methodology, stocks with such a favorable combination offer solid investment opportunities.
NVIDIA has surged 237.5% year to date. It is benefiting from strong momentum in AI, high-performance computing and accelerated computing. Its data center business remains well-poised to gain from the growing demand for generative AI and LLMs powered by graphic processing units based on NVIDIA Hopper and Ampere architectures.
Also, solid hyperscale demand and a strong uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds. Further, NVIDIA’s collaborations with Mercedes-Benz and Audi are expected to advance its presence in autonomous vehicles and other automotive electronics space.
Currently, NVDA carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 0.7% to $19.85 per share over the last 30 days.
Meta Platforms has surged 194.9% on a year-to-date basis. It is benefiting from steady user growth across all regions, particularly the Asia Pacific. Increased engagement on Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. The company is experiencing traffic growth on Instagram and Facebook owing to its usage of AI to recommend.
In addition, Meta’s growing efforts in the generative AI space into which it made its foray with Large Language Model Meta AI (“Llama”) remain noteworthy. In collaboration with Microsoft, Meta unveiled the next generation of Llama, called Llama 2. The social media giant also released Code Llama, an LLM that can use text prompts to generate and discuss codes.
Currently, META carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's 2024 earnings have moved north by 0.1% to $17.57 per share over the last 30 days.
CrowdStrike shares have rallied 144.9% in the year-to-date period. The company is benefiting from the solid demand for cyber-security solutions. An increasing number of data breaches and the growing need for security and networking products due to the ongoing hybrid working trend are leading to the uptake of CRWD’s solutions. Also, the digital transformation and cloud migration initiatives being taken by various organizations are expected to continue boosting the company’s end-market demand.
In addition, CrowdStrike’s strategic acquisitions, such as Bionic and Reposify, along with strength in its Falcon platform cloud modules, are expected to fuel growth in the near term.
Currently, CRWD carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 5.2% to $3.64 per share over the last 30 days.
MongoDB shares have risen 111.8% on a year-to-date basis. The company is gaining from the increasing popularity of its data platform among developers. Further, strong momentum in Atlas is a plus. MDB is witnessing continuous growth in the MongoDB Atlas customer base. Its deepening focus on acquiring new customers, cross-selling to existing customers and retaining them with the introduction of new Atlas features is expected to drive its top-line growth in the days ahead.
The launch of Atlas for Industries, Atlas for Financial Services, Atlas for the Public Sector, and Atlas for Manufacturing and Automotive remains a major upside.
Currently, MDB carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 14.3% to $3.20 per share over the last 30 days.
Arlo Technologies has advanced 170.4% year to date. The company’s expanding portfolio of products and services has been acting as a key catalyst. Arlo Total Security, a comprehensive subscription service offering 24/7 professional monitoring and security hardware at affordable monthly prices and no upfront costs, is expected to pick up demand in the near term. ARLO’s expanding partner base has been acting as a tailwind.
Moreover, strong momentum in Arlo’s connected devices offerings, which include wire-free smart Wi-Fi and LTE-enabled cameras, advanced baby monitors and smart security lights, remain positive.
Currently, ARLO carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's 2024 earnings have been stable at 5.2% to 41 cents per share over the last 30 days.
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5 Tech Stocks That Have Returned More Than 100% in 2023
Technology stocks have had a major bounce back in 2023, as evidenced by a rally of 44.03% in the tech-heavy Nasdaq composite in the year-to-date period. Further, the Technology Select Sector SPDR ETF has risen 55% in the same time frame, outperforming the S&P 500 index’s return of 25.1%.
The primary reason behind such returns is the normalization of supply-chain disruptions, which have taken a toll on the tech sector in the past few years.
Also, cooling inflationary pressure and the optimism that the Federal Reserve is close to ending the rate hike cycle drove growth in the sector. The Fed has held interest rates unchanged at 5.25% to 5.5% for the third successive meeting. It has also signaled three rate cuts in 2024, with further rate cuts expected in 2025 as inflation cools down.
Advanced Technologies: A Key Catalyst
Apart from macro tailwinds, having large as well as small tech companies making concerted efforts toward bolstering their Artificial Intelligence (AI), Machine Learning (ML) and cloud computing capabilities remained a major upside.
2023 also witnessed huge success with generative AI technology worldwide due to the growing adoption of chatbots, especially ChatGPT by Microsoft-backed OpenAI.
The emergence of large language models (LLM) and their increasing use cases have been a plus. Tech giants like Microsoft, Alphabet’s Google, Amazon and Meta Platforms (META - Free Report) are continuously putting strong efforts to boost the capabilities of their respective LLMs. In regard to this, the introduction of Amazon Bedrock and Google’s Gemini remains noteworthy.
The growing proliferation of blockchain technology, IoT, AR/VR, autonomous vehicles, wearables, connected devices and cryptocurrency have been driving growth in the semiconductor industry, which is the building block of the underlined sector. Increasing user engagement on social media platforms has been another positive.
In addition, rising IT spending has been contributing well to the performance of the technology sector. It is expected to hit $5.1 trillion in 2024, indicating growth of 8% year over year per Gartner.
Given this upbeat scenario, we advise investors who are looking for good investment opportunities in 2024 to park their money in technology stocks with strong growth potential.
We recommend five stocks from the Zacks Computer and Technology sector, namely NVIDIA (NVDA - Free Report) , Meta Platforms, MongoDB (MDB - Free Report) , CrowdStrike (CRWD - Free Report) and Arlo Technologies (ARLO - Free Report) .
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Why Should You Invest in These Stocks?
With the help of the Zacks Stock Screener, we have selected the abovementioned five tech stocks that have returned more than 100% in 2023 and are well-poised to grow throughout 2024 as these are highly reputed, fundamentally strong and financially resilient.
Apart from having solid fundamentals, the aforementioned stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Per Zacks’ proprietary methodology, stocks with such a favorable combination offer solid investment opportunities.
NVIDIA has surged 237.5% year to date. It is benefiting from strong momentum in AI, high-performance computing and accelerated computing. Its data center business remains well-poised to gain from the growing demand for generative AI and LLMs powered by graphic processing units based on NVIDIA Hopper and Ampere architectures.
Also, solid hyperscale demand and a strong uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds. Further, NVIDIA’s collaborations with Mercedes-Benz and Audi are expected to advance its presence in autonomous vehicles and other automotive electronics space.
Currently, NVDA carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 0.7% to $19.85 per share over the last 30 days.
Meta Platforms has surged 194.9% on a year-to-date basis. It is benefiting from steady user growth across all regions, particularly the Asia Pacific. Increased engagement on Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. The company is experiencing traffic growth on Instagram and Facebook owing to its usage of AI to recommend.
In addition, Meta’s growing efforts in the generative AI space into which it made its foray with Large Language Model Meta AI (“Llama”) remain noteworthy. In collaboration with Microsoft, Meta unveiled the next generation of Llama, called Llama 2. The social media giant also released Code Llama, an LLM that can use text prompts to generate and discuss codes.
Currently, META carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's 2024 earnings have moved north by 0.1% to $17.57 per share over the last 30 days.
CrowdStrike shares have rallied 144.9% in the year-to-date period. The company is benefiting from the solid demand for cyber-security solutions. An increasing number of data breaches and the growing need for security and networking products due to the ongoing hybrid working trend are leading to the uptake of CRWD’s solutions. Also, the digital transformation and cloud migration initiatives being taken by various organizations are expected to continue boosting the company’s end-market demand.
In addition, CrowdStrike’s strategic acquisitions, such as Bionic and Reposify, along with strength in its Falcon platform cloud modules, are expected to fuel growth in the near term.
Currently, CRWD carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 5.2% to $3.64 per share over the last 30 days.
MongoDB shares have risen 111.8% on a year-to-date basis. The company is gaining from the increasing popularity of its data platform among developers. Further, strong momentum in Atlas is a plus. MDB is witnessing continuous growth in the MongoDB Atlas customer base. Its deepening focus on acquiring new customers, cross-selling to existing customers and retaining them with the introduction of new Atlas features is expected to drive its top-line growth in the days ahead.
The launch of Atlas for Industries, Atlas for Financial Services, Atlas for the Public Sector, and Atlas for Manufacturing and Automotive remains a major upside.
Currently, MDB carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's fiscal 2025 earnings have moved north by 14.3% to $3.20 per share over the last 30 days.
Arlo Technologies has advanced 170.4% year to date. The company’s expanding portfolio of products and services has been acting as a key catalyst. Arlo Total Security, a comprehensive subscription service offering 24/7 professional monitoring and security hardware at affordable monthly prices and no upfront costs, is expected to pick up demand in the near term. ARLO’s expanding partner base has been acting as a tailwind.
Moreover, strong momentum in Arlo’s connected devices offerings, which include wire-free smart Wi-Fi and LTE-enabled cameras, advanced baby monitors and smart security lights, remain positive.
Currently, ARLO carries a Zacks Rank #2 and has a Growth Score of A. Estimates for the company's 2024 earnings have been stable at 5.2% to 41 cents per share over the last 30 days.