By
George Sweeney, DipFAUpdated
Tech is evolving at high speed, and with the introduction of artificial intelligence (AI), we could be on the verge of another technological revolution.
Today, the biggest 10 global tech stocks have a combined market cap of over $12 trillion (around £9.75 trillion). If these 10 tech stocks formed a country, only the US and China would have bigger economies. The challenge for investors, however, is finding the best tech stocks to buy today, which will also be tomorrow’s superstars.
Choosing the best tech stocks is subjective because different types of investments will suit various investors. Like people, every stock has its flaws.
So, to build our list of the best tech stocks right now, we’ve used data from the S&P Global 1200 Information Technology Capped Index. This is the industry benchmark used by most major tech-focused exchange-traded funds (ETFs).
| Tech stock | Icon | 1-year performance (to Aug. ’24) | 5-year performance (to Aug. ’24) | Link to invest |
|---|---|---|---|---|
| Nvidia (NVDA) |  | 121.16% | 2,509.09% | Invest with XTBCapital at risk |
| Broadcom (AVGO) |  | 58.38% | 415.34% | Invest with XTBCapital at risk |
| Taiwan Semiconductor Manufacturing (2330) |  | 57.71% | 247.14% | Invest with XTBCapital at risk |
| Microsoft (MSFT) |  | 19.70% | 186.94% | Invest with XTBCapital at risk |
| ASML Holding NV (ASML) |  | 18.30% | 279.81% | Invest with XTBCapital at risk |
| Apple (APPL) |  | 17.01% | 316.46% | Invest with XTBCapital at risk |
| Advanced Micro Devices (AMD) |  | 15.42% | 294.33% | Invest with XTBCapital at risk |
| Salesforce (CRM) |  | 10.62% | 66.71% | Invest with XTBCapital at risk |
| Samsung (005930) |  | 5.84% | 68.02% | Invest with XTBCapital at risk |
| Adobe (ADBE) |  | -3.85% | 72.75% | Invest with XTBCapital at risk |
For investment purposes, this usually refers to companies within the “Information Technology” bracket in the Global Industry Classification Standard (GICS).
This is because most businesses use technology in some regard. So, to be classified as a tech stock, the primary business purpose needs to revolve around technology, whether that’s hardware or software.
The 3 main types of tech stocks available to investors include:
Keep in mind that some tech stocks will have blurred boundaries. Many software companies, like Microsoft for example, now make hardware. Also, many top tech stocks, like Apple, have involvement across all 3 areas.
This sector has seen meteoric growth in the last few decades. Technology touches just about every part of our lives, except maybe when it comes to brick-laying and the circus. Jokes and mortar aside, technology is vital to the world. And this has been reflected in the fast price-growth of these stocks.
Most growth in the flagship US stock market index, the S&P 500, has been driven by the best-performing tech stocks. Although tech stocks make up only 27.5% of the index, they account for the majority of its expansion in recent years. Or if you look at an even more tech-heavy index like the Nasdaq 100, it’s returned close to 80% in the past 5 years and over 350% in the last 10 years.
Unsurprisingly, investors want to get involved by putting a slice of these technology stocks into their portfolios. However, it’s important to remember that past performance doesn’t dictate future results. The top sectors from the last few decades may not continue to outperform. There was a time when car manufacturers and oil companies were the bee’s knees. Just saying.
Here’s an overview of some of the main advantages of investing in this category of stocks:
There are some downsides worth considering if you’re thinking about investing:
"The best-performing mainstream tech stock over the past 5 years has been Nvidia (NVDA) with growth of just under 800%. However, an argument could also be made that Tesla (TSLA) is somewhat of a technology stock and that has witnessed an 830%+ gain.
What’s worth remembering is that these stocks are very unlikely to see anywhere near that kind of growth again anytime soon, if ever. So, your challenge is to find the best tech stocks of tomorrow, ideally the investments that haven’t yet seen such explosive growth."
Aside from trying to pick the best tech stock to hold in your portfolio, there are some alternative ways you can invest to get exposure:
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Technology stocks have been the driver of most of the recent global growth around the world. And it’s definitely worth considering at least a certain level of exposure within your portfolio.
Finding the best tech stocks is where the difficulty lies because newer technology could come along and disrupt today’s top companies or make it harder for them to make giant piles of cash. Technology isn’t a sector to be ignored. Just keep in mind that the world is constantly changing. So don’t bet your entire future on tech stocks.
This is something only you can decide. The Apple stock price has seen plenty of growth in the last few years, and as the company grows, getting bigger becomes more difficult.
Apple has become a staple in many investors' portfolios because of its ability to generate cash and sales like no one else. However, if you want explosive growth, you may want to look for a company in earlier stages.
This will change frequently depending on broader outside factors and the rest of the economy. But if you want some inspiration, check out our guide on the best shares to buy now.
George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio
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