The technology sector is one of the growth-oriented sectors in the stock market today, and it is quite understandable that most of the investors want to make the best use of this growth by investing in these stocks right away. However, it could be a difficult challenge to choose one from the sea of technology stocks available today. There are big names, and there are start-ups. How to make the right decision and on what basis should this decision be made? Here are some of the top stocks that experts recommend you invest in, if the technology industry is your preferred choice.
The best in the business
When it comes to technology, the best stock for any season is Apple (AAPL, Financial). Would you not love a company that is the best in the business as far as its products are concerned? Apple has literally thrown its competitors out of the race in the smartphone market as nearly 80% of the market is controlled by its iPhones. The iPhone, with its ease of operations, technology, sleek design and high durability, has been the prized possession of many a smartphone user these days even though it is priced at quite a higher range than the models of other companies. During the previous quarter, Apple sold a phenomenal 74 million iPhones, a record in its own sort. Due to this single product, Apple’s revenues grew by 29% from the last quarter and its earnings per share grew at the rate of 47% from the last year.
The other promising factor for Apple is the fact that it will focus on the most promising economy in the world – China –Â during this year. Income from this economy grew by a mammoth 70% this quarter from the previous quarter; however, there is still lot of room for Apple to grow in China. This is because, currently, profits from China contribute to just a little over 20% of Apple’s total revenues. This year, Apple will join hands with the world’s biggest wireless service operator, China Mobile (CHL, Financial). As a result of this, Apple’s earnings per share are expected to touch the mark of $8.63 per share. With a promising future ahead and very strong financials currently, Apple is the choice of investment that you need to make if you are really smart. The share price trend of the company for the last one year is seen below:
The best for long term returns
If you are looking for a technology stock that is the best for long term returns, you must choose Facebook (FB, Financial), the social networking giant. Led by a smart mind in Mark Zuckerberg, Facebook is making the right moves at the right time to emerge as leader of the technology industry. The company, with its strategic acquisitions of WhatsApp and Instagram, has millions of average monthly users. The instant messaging application of WhatsApp alone has around 700 million monthly average users, also known as MAUs, currently. This number is only expected to increase in the future. As a cherry on the cake, Facebook is planning to make money from this messaging application as the app will be available to the third-party service providers as well. The other important acquisition of Facebook has been the site where photos are shared so commonly today, Instagram. Facebook paid a paltry $1billion for this deal. However, Instagram is an app that is worth a phenomenal $35 billion today and has around 300 million monthly average users. These are just a couple of strategic acquisitions that Facebook made during the recent past; there are many more surprises that Facebook has for its investors in the coming years and for this single reason, it is the best technology stock to buy for investors who are looking for long term gains. The stock movement of Facebook for the last year is seen here:
Conclusion
Stocks in the technology sector have high growth rates. However, as an investor, you need to be careful while choosing them. Not all stocks that provide handsome returns are great choices. If you choose a company with no growth potential, it will soon start providing you negative returns. If you want to save yourself from this tricky situation, ensure that you do the necessary groundwork and choose only those stocks that show great promise for the future. The stocks mentioned above belong to this category and are safe bets for you to invest in as their brand names are too big for any sort of market corrections or recession in the future.
