Why Invest in Technology Stocks?
If you’ve ever wondered if investing in tech stocks is worthwhile, ask yourself one question: what drives economic growth? The answer is obvious: technological advancement. Progress has always come from technology, which is why it makes sense to own the top tech stocks right now.
In fact, it always makes sense to own tech stocks. But before we get to the best tech stocks to watch now, let’s talk a bit about technology.
From the steam engine to the personal computer, technology is what helps us make more out of less. Innovation is the edge of the sword, the battering ram knocking on tomorrow’s door. If you don’t believe, consider the history of an American icon—Henry Ford.
Ford built the first mass production car company in 1903, and in doing so, created a dynastic business that would span generations. Cars were cutting edge technology at the time. But here’s the important part: Anyone who invested in Ford back then would have made a killing.
We’re talking about fortunes that could last several lifetimes! Ford is a blue chip stock today, but it was a growth machine at the dawn of the 21st century. The horse and buggy was the common way of getting around, so mechanical transport seemed like a revolutionary idea.
That idea paid off in a big way. Ford became a “dynasty stock” that ensured generations of wealth.
Sadly, there’s no way to go back in time. We will never get a chance to invest in Ford stock circa 1903, but here’s what we can do.
We can open our eyes to the dynasty stocks being made around us. Look no further than the best technology stocks for 2017. Many of these amazing stocks could earn triple-digit returns for shareholders, and in relatively narrow time frames.
Every few years, a new class of dynasty stocks comes into existence, usually in the technology sector. It is the most essential feature of capitalism. Creative destruction. Once a market settles into comfort, someone will come along to shatter its peace with a better idea.
Ford destroyed the horse and buggy. Computers killed the typewriter. Mp3 players took the place of CD players, only to be obliterated by smartphones a few years later.
On and on, the cycle continues.
The moral of the story is that emerging tech tends to win the day. And those who invest in emerging tech usually get rich in the process. Those who do not, usually regret it.
Our Tech Stocks List
You might be wondering how dynasty stocks can exist if new technologies are always replacing old ones. How can a company continue to deliver extraordinary gains if it continuously battles new challengers? This is an excellent question.
Simple: It buys the companies that threaten its dominance. Or it bullies them out of the market by taking short-term losses. Or it uses economies of scale to achieve incomparable savings. There are a number of ways to keep market power—if you know what you’re doing.
The best tech stocks for 2017 are usually run by founder/CEOs. Many of these geniuses built their companies from the ground up (like Henry Ford), meaning they are accustomed to the bare-knuckled competition of entrepreneurship.
That’s what separates them from the silver-spoon kids who move straight from MBAs to a cushy corner offices. Unlike those yuppies, these founders are on the front lines of innovation.
They are so close to the technology that it’s easy for them to see what’s coming around the corner. They know what the most important innovation is before it happens, because they are the ones building it.
I feel like this is incredibly important to understand before you peruse our list of the best tech stocks for 2017. In any case, without further ado, here is our tech stocks list.
BEST TECHNOLOGY STOCKS FOR 2017
Note: We’ve divided the list into Stage 1 and Stage 2 to denote the maturity of the best tech stocks right now.
Stage 1 dynasty stocks are still in the empire-building phase of their lifespan. This suggests that investors stand to make slightly bigger gains than they would from Stage 2 dynasty stocks, which are companies that are defending their empires.
Tech Stocks List Stage 1: Emerging Giants
From the three Stage 1 dynasty stocks on our list, one is a semiconductor company, another does cybersecurity, and the third is in biotech. The unifying strain in these stocks is their ability to innovate—all three are in emerging technology fields.
This implies that their upside potential is enormous. Not only are they capable of capturing more market share, but the overall pie is growing as well. This is a fortunate position for the best tech stocks right now to find themselves in, but it’s even better for those of us that want to get rich through investing.
Some of you may already be familiar with NVIDIA Corporation (NASDAQ:NVDA). It was a breakout stock in 2016, one which we covered quite thoroughly here at Profit Confidential.
In fact, readers that followed our bullishness on NVDA stock could have doubled their money in a few months.
Chart courtesy of StockCharts.com
We were quick to see what the rest of the market is just starting to understand—that NVIDIA’s graphics chips are amazingly well suited for virtual reality and driverless cars.
NVIDIA has a head start in conquering these industries, but it is the actual chips that could cement NVDA stock’s victory as one of the top tech stocks to watch now.
NVIDIA chips could become for driverless cars what Intel chips were to the personal computer, or Qualcomm chips to the smartphone. The potential here should not be understated. Keep a close eye on NVDA stock, dear reader, because it is one of the best tech stocks for 2017.
Symantec Corporation (NASDAQ:SYMC) is the cybersecurity stock I referred to earlier. You probably know it by another name, however: “Norton Antivirus.” Yes, that Norton Antivirus; the annoying pop-up that incessantly reminds you to renew your malware protection.
Perhaps it seems like a nuisance right now. That was the general reaction to cyber threats in the 2000s. Most people were content to believe that hacks happened to other people, not them. But think about the headlines of the past few years.
Corporations are getting hacked. Governments, too. Celebrities are having their nude photographs plastered across the internet. If those people, with their money and power, can be hacked, then why not you? There are hackers waiting to exploit your feeling of safety.
At a certain point in the near future, this truth will become widely known. Once it is, people will be lining up for cybersecurity. They’ll crave digital protection, making Symantec one of the best tech stocks to watch now. Symantec is the only one offering end-to-end service right now, so I’m fairly certain it’ll scoop up these customers.
This trend might already be in motion. Just take a look at the SYMC stock chart. It’s up almost 30% since the start of the year, which clearly makes it one of the top tech stocks for 2017.
Chart courtesy of StockCharts.com
Those who know the biotech sector are aware of a tsunami headed our way. Genome sequencing, a staple of science fiction, is about to become a commercial reality.
The implications for health care solutions stretch beyond imagination, but if there’s one thing I can clearly picture, it’s getting rich off this amazing innovation.
Illumia, Inc. (NASDAQ:ILMN) is one of the companies funding this revolution. This San Diego-based firm is also one of the top tech stocks right now. To an extent, it is simply in the right place at the right time, which is why ILMN stock is soaring.
Chart courtesy of StockCharts.com
I would advise investors to take a hard look at their financial position, because research such as this is expensive. But on the whole, Illumina stock is dabbling in some potentially huge scientific research. The payoff from commercializing its research would be massive.
Tech Stocks List Stage 2: Established Giants
As you can tell from above, Stage 1 dynasty stocks are still cementing their market leadership. There are still question marks (albeit small ones) over their heads, which means there are proportionately more gains waiting to be exploited.
Stage 2 dynasty stocks are standing on firmer ground. They have carved out a kingdom for themselves, and are willing to use any number of tricks to hold on to power. This means they can deliver surprisingly large capital gains for companies their size.
Since they are more well-known, I won’t bother going into detail about what they do. I’m sure you’ve all heard of these tech stocks to watch now: Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Google-parent Alphabet Inc (NASDAQ:GOOG).
But here’s what you might not know: All three of those stocks crushed the S&P 500 over the last 24 months. Amazon, in particular, is capable of growing like a startup.
Chart courtesy of StockCharts.com
Shareholders of AMZN stock have more than doubled their money since April 2015, which is shocking when you consider the company’s $407.8-billion market cap. GOOG shareholders and FB shareholders haven’t done too badly either.
What’s the unifying factor here for these best tech stocks right now? Easy: All three companies are still run by their founders.
Larry Page is heading Alphabet, the parent company of Google; Jeff Bezos continues to be the secret sauce of Amazon; and Mark Zuckerberg is basically the “dictator in perpetuem” of Facebook. Like Henry Ford before them, these brilliant men made their shareholders very rich.
If you take away one thing from this article, make sure it is this: technology is progress.
Railways, electricity, cars, computers, guns, smartphones…they all sprang from innovation and technology. We call them by another name once enough time has passed, so ask yourself, what could that be in 10 years? Artificial intelligence? Genome sequencing?
Whatever it is, you can bet the top tech stocks for 2017 are working on it right now. By investing in those companies today, you could put yourself at the frontier of technological innovation, and therefore, at the leading edge of progress.