My list of the best technology stocks for 2016 is based on two industry trends: the growth of capital expenditures on developing new products and the growing use of mobile advertisement in industry and consumer applications.
With that in mind, below I identify the top technology stocks to watch in 2016 that you may want to include in your investment portfolio.
NXP Semiconductors NV (NASDAQ:NXPI)
NXP Semiconductors NV (NASDAQ:NXPI) engages in providing solutions that enable secure connections for a smarter world. The company operates in more than 25 countries and primarily focuses on innovation in the areas of connected cars, cyber security, portables and wearables, and the “Internet of things.” (Source: NXP, last accessed August 19, 2015.)
In July, the company reported total revenue of $1.51 billion, 11% higher than the same period in the prior year and nearly three percent higher than the first quarter. NXP Semiconductors has a market cap of $22.09 billion. The company’s stocks rose roughly 13.51% this year, and its currently trading at $87.04 per share.
Notably, the company received an approval for the proposed merger with Freescale Semiconductor, which would make NXP the fourth-largest semiconductor company in the growing industry.
The latest merger would enable the combined company to become the number one supplier in auto semiconductors, the number one supplier in global microcontrollers, and a prominent supplier in mobile payments. With that in mind, I wouldn’t be surprised to see the share prices soar significantly in the coming months.
Facebook Inc. (NASDAQ:FB)
The giant social media company is trading at a near all-time high. Shares of Facebook Inc. (NASDAQ:FB) rose more than 21% this year, trading at $94.66 apiece.
During the second quarter of 2015, the total revenue was more than $4.0 billion for the first time, with the advertising revenue growing by 43% year over year. This reflects the company’s improvement on the quality, performance, and usefulness of their platform. (Source: Facebook, last accessed 19, 2015.)
Mobile advertising revenue, a primary sales generator, holds up nearly 76% of the advertising revenue stream for the second quarter of 2015. It is up by the double digits from approximately 62% of advertising revenue in the same period last year.
Currently, the company’s strategies appear to be very effective. As it stands, 1.5 billion people use Facebook each month and more than 1.3 billion people are using it on their mobile devices. On the other hand, with more resources contributed to mobile advertising and making the ads more relevant, it is expected that the company continues to grow its footprint into the mobile advertising marketplace and attract more customers in the foreseeable future.
Sprint Corporation (NYSE:S)
Sprint Corporation (NYSE:S) is the fourth-largest wireless communications service provider in the United States. Recently, the company announced a new iPhone “Forever” upgrade plan that allows phone upgrades anytime. The announcement just came in a few weeks ahead of Apple Inc’s (NASDAQ:AAPL) expected launch of the iPhone 6s.
Sprint has been improving the customer experience with better network performance to improve its market share. The company has also made significant progress on retaining its customers by including simple offers such as its industry-first leasing program and the recently introduced All-In Wireless plans. (Source: Sprint, last accessed August19, 2015.)
In August, Sprint reported financial results for the first fiscal quarter of 2015. The company recorded net operating revenue of $8.0 billion with operating income of $501 million and adjusted earnings before tax and interest (EBITDA) of $2.1 billion.
The company also raised its adjusted EBITDA’s outlook for fiscal 2015 from the previous expectation of $6.5 to $6.9 billion to $7.2 to $7.6 billion. Shares of Sprint rose nearly 17% this year, trading at $4.85.
All told, with improving customer trends, a greater reduction in operating expenses, and a higher mix of sales on device financing options, the company’s shares are expected to increase in the second half of 2015 and into 2016.