Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

3 Top-Performing Tech Stocks for 2021

Companies / AI Jan 26, 2021 - 11:52 AM GMT

By: Robert_Ross

Companies

Dear Reader,

One of my favorite reads to start off a new year is Byron Wien's list of 10 surprises, which he's published for 36 years.

While I could spend an entire article debating each point in his 2021 list, today I want to tackle the last part of No. 8:

"The equity market broadens out. Stocks beyond healthcare and technology participate in the rise in prices…

"Big cap tech… stocks are laggards for the year."

Big techs lagging the broad markets this year would indeed be a surprise. But I'm making the opposite bet—that tech will be the year's top-performing sector.


Today I'll tell you which stocks I believe will lead the sector… and the markets… higher.

Big Tech Is About to Get a Lot Bigger

I can hear you now: “But Robert, technology stocks are so expensive! Haven’t you seen Tesla (TSLA)?”

Yes, some technology stocks are overvalued. But if you compare today's tech stock prices to their March 2000 peak, they’re actually reasonably priced.

The five largest technology stocks are 20% cheaper than they were in March 2000.

And that’s with the Federal Reserve’s easiest monetary policy in US history.

Fed to Keep Lending the Market a Helping Hand

Remember the good old days of earning 5% on a bank savings account?

The Federal Reserve’s easy money policies that push people out of “safe” investments (i.e., money market funds and bonds) and into riskier assets (i.e., stocks) ended that.

Fun fact: The Fed’s easy-money policy was not nearly this easy back in the Tech Bubble days.

That’s why—though tech stock valuations are inching closer to the highs we saw in March 2000—the historically low Fed Funds rate means valuations should be much higher than the Tech Bubble 1.0.

No Bubble Here: Smart Money Expects Techs to Pop Higher

A recent Bank of America survey showed hedge fund managers have more exposure to stocks than at any period in the last 18 months.

Analysts see more upside, too. Potentially a lot more.

For example, Goldman Sachs just raised its price target on Alphabet (GOOG) to $2,250:

That's a pop of about 25% from its recent price of $1,797.

There are plenty of opportunities for dividend-paying tech stocks as well. One such company is Oracle (ORCL).

The IT giant generates over 80% of its sales from cloud-related products. Oracle also secured a bid to become the "trusted technology partner" of TikTok—the wildly popular social media app that’s been all over the news lately.

Oracle is a trusted name in another key way: It pays a solid 1.7% dividend yield. Plus, it earns a perfect 100/100 score on my proprietary Dividend Sustainability Index (DSI), so you can rest assured this dividend is safe.

We can say the same about a surprise technology stock: Walmart (WMT).

Don't be one of those people who don’t consider Walmart a tech company. This Bentonville, Ark., retail empire boasts the second-largest e-commerce platform in the US.

Walmart grew its e-commerce sales a massive 74% over the last year. This bests even Amazon’s (AMZN) robust 48% growth.

And when it comes to dividend payers, Walmart is tough to beat. This Dividend Aristocrat has raised its dividend for 31 years in a row:

The company pays a modest 1.7% dividend yield, which my DSI system tells me is safe AND set to grow over the longer term.

Bottom line: While technology stocks are on an incredible run, I think this is only just the beginning.

So, look forward to the continued outperformance of some of the world's biggest tech companies in the coming year. To see how else I'm investing, read my top three predictions for 2021 here.

Robert Ross is a senior equity analyst at Mauldin Economics. He is the editor of the income investing-focused letter Yield Shark and the free ezine The Weekly Profit.

By Robert Ross

© 2020 Copyright Robert Ross - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in