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Top Tech Stocks for June 2021

The technology sector is comprised of businesses that sell goods and services in electronics, software, computers, artificial intelligence (AI), 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 slightly underperformed the broader market. XLK has provided investors with a total return of 45.0% over the past 12 months, just below the Russell 1000’s total return of 46.7% in this same period. These market performance numbers and statistics in the tables below are as of May 24, except for the statistics in the “Best Value Tech Stocks” table, which are as of May 25.

Here are the top 5 tech stocks with the best value, the fastest growth, and the most momentum.

Value investing is a factor-based investing strategy that involves picking stocks that you believe are trading for less than what they are intrinsically worth, usually by measuring the ratio of the stock’s price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings (P/E) ratio. Value investors believe that if a business is cheap compared to its intrinsic value, in this case as measured by its P/E ratio, the stock price may rise faster than others as the price comes back in line with the worth of the company. These are the tech stocks with the lowest 12-month trailing P/E ratio.

Best Value Tech Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
CDK Global Inc. (
CDK)
53.05 6.5 6.3
Intel Corp. (
INTC)
56.96 230.0 12.8
Arrow Electronics Inc. (
ARW)
123.65 9.1 12.9
Synnex Corp. (
SNX)
126.71 6.6 13.3
HP Inc. (
HPQ)
32.31 40.3 13.6

Source: YCharts

  • CDK Global Inc.: CDK Global provides integrated technology to the automotive, heavy truck, recreation, and heavy equipment industries. The company helps automotive dealerships and original equipment manufacturers (OEMs) to optimize and streamline their daily operations. CDK Global has more than 30,000 retail client locations.
  • Intel Corp.: Intel designs and manufactures computer components and related products, including processors, chipsets, server products, memory, and storage. Its products are designed for a range of traditional and emerging computing technologies, including 5G networks, cloud computing, and AI. Intel employs a global workforce of around 110,600 people. On May 3, the company announced that it would invest $3.5 billion to expand its New Mexico manufacturing operations, with a focus on advanced semiconductor packaging technologies. Construction is expected to start late in 2021.
  • Arrow Electronics Inc.: Arrow Electronics is a distributor of electronic components and computer product, and serves roughly 180,000 technology manufacturer and service providers. It employs nearly 20,000 globally. For Q1 2021, the company’s net income attributable to shareholders more than quadrupled year-over-year (YOY) fueled by strong sales growth of 31.4%, driven by strong performance in the Asia-Pacific area.
  • Synnex Corp.: Synnex provides IT supply chain services to the technology industry, including distribution, logistics, and integration services. Synnex distributes over 30,000 technology products from manufacturers around the world and provides technology solutions to more than 20,000 resellers and retail customers.
  • HP Inc.: HP is a global provider of technology services, software, and products, including desktop and notebook computers, workstations, retail point-of-sale systems, displays, and printers. HP serves individual consumers, businesses of all sizes, and government customers. The company holds 27,000 patents and operates in 170 countries throughout the world. HP’s board of directors declared on May 25 a dividend of $0.1938 per share of common stock, payable on July 7 to shareholders as of June 9.

These are the top tech stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Tech Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
PTC Inc. (
PTC)
132.82 15.5 1,430 28.4
CDK Global Inc. (CDK) 53.05 6.5 1,390 1.6
Advanced Micro Devices Inc. (
AMD)
77.44 94.1 221.4 92.9
Datto Holding Corp. (
MSP)
26.84 4.3 952.4 16.2
DXC Technology Co. (
DXC)
37.33 9.5 1,240 -14.6

Source: YCharts

  • PTC Inc.: PTC is a provider of software and technology services. The company works with manufacturers to boot efficiency savings by integrating augmented reality, internet of things (IoT), computer aided design (CAD), and product lifecycle management (PLM) technology into a variety of products. PTC employs a team of roughly 6,200 on a global basis. In late April, the company announced that Catherine Kniker was promoted to executive vice president and chief strategy officer. Kniker has held numerous roles at PTC, including as manager of strategic global alliances.
  • CDK Global Inc.: See company description above.
  • Advanced Micro Devices Inc.: Advanced Micro Devices is a global semiconductor company. AMD sells microprocessors, chipsets, graphics processing units (GPUs), development services, server and embedded processors, and technology for game consoles. The company’s operations span more than 35 locations throughout the world.
  • Datto Holding Corp.: Datto Holding provides cloud-based software and security services for delivery by managed service providers (MSPs). Datto has more than 20 global locations and employs more than 1,600 people.
  • DXC Technology Co.: DXC Technology is a provider of information technology services and products. The company specializes in IT modernization, including both on-premises and cloud services, and serves 6,000 customers across the private and public sectors globally. On May 25, the company announced that it had been awarded a new seven-year IT services agreement extension by the Flemish government to operate and maintain key parts of their enterprise computer system, including through a hybrid cloud infrastructure.

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 higher still. 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 (%)
Cloudflare Inc. (
NET)
78.88 24.5 179.1
NCR Corp. (
NCR)
48.78 6.4 173.0
HubSpot Inc. (
HUBS)
506.95 23.7 160.9
CrowdStrike Holdings Inc. (
CRWD)
214.35 48.4 160.7
Square Inc. (
SQ)
210.95 96.1 158.9
Russell 1000 N/A N/A 46.7
Technology Select Sector SPDR ETF (XLK)  N/A N/A 45.0

Source: YCharts

  • Cloudflare Inc.: Cloudflare provides website infrastructure and security services. Roughly 25 million internet properties utilize Cloudflare’s services, and the company serves about 25 million HTTP requests per second. Cloudflare reported a net loss for Q1 2021, despite 51.3% YOY revenue growth. The company’s large customer count was up 70% YOY, driving Cloudflare to more than 4 million total customers.
  • NCR Corp.: NCR manufactures automated teller machines (ATMs), self-checkout and self-service kiosks, and other financial transaction machines and related software and services. It sells primarily to the financial services, restaurant, and retailing industries. The company employs more than 34,000 across 160 countries.
  • HubSpot Inc.: HubSpot sells cloud-based marketing and sales software to corporate customers. The company’s platform offers various business management solutions, featuring integrated applications to help firms attract visitors to their website, convert visitors into leads, turn those leads into customers and make them so satisfied that they become promoters of the business. HubSpot serves more than 113,000 customers in over 120 countries. The company reported a net loss of $23.2 million for Q1 2021 even though revenue rose 41.4% YOY, driven by strong growth in subscription revenue and professional services and other revenue.
  • CrowdStrike Holdings Inc.: Crowdstrike Holdings offers a cybersecurity platform that provides a range of products aimed at thwarting computer security breaches, including antivirus, endpoint detection and response, device control, vulnerability management, threat intelligence, and more. The company includes among 37 of the top 100 global companies.
  • Square Inc.: Square is a financial services and online payments company. It provides merchants with hardware solutions for processing debit and credit card transactions, as well as point-of-sale and other payment and business-management software. The company also provides a Cash App for individual consumers, enabling them to easily send and receive money and access other financial services.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources

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  29. Square Inc. “Form 10-K for the Fiscal Year Ended December 31, 2020,” Page 4. Accessed May 25, 2021.

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