Tech stocks have been the star of the market through the first two decades of the 21st century. Expect that to continue into the third.
That said, the ways investors can play the technology sector have evolved over the years.
Once upon a time, tech stocks mostly seemed like speculative picks – high reward but equally high risk. Just consider the Y2K tech bubble. It was almost all speculation… The operative word being “almost.” Investors who made the right calls made billions. Can you imagine getting into Apple (AAPL) at $1.78, Google (GOOG) at IPO, or Netflix (NFLX) at $7.78?
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But the (dot) Com bubble of ‘99-’00 was a different time. Technology was nowhere near as big of an influence in our lives as it is now. Technology’s growing influence across all aspects of society, as well as the need and development of new technologies, has widened the field. Just consider all of the opportunities 2020 has brought for the tech industry. All of the problems we’ve gone through recently need solving… And tech companies you’ve probably never heard of are becoming household names. Just take Zoom (ZM), up more than 400% YTD, Moderna (MRNA), which has stacked on more than 480% this year. And then there’s Tesla (TSLA), which has accumulated an astonishing 670% over the past year. The truth is, some of these once-unknown stocks ARE going to be the next Apple, Google, Amazon and Netflix. These are blue chips in the making, and we hope you and our other readers are millionaires in the making…
So, we put together this hotlist of three of the best tech stocks to buy in 2021.
QTS Realty Trust (QTS)
QTS Realty Trust (QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 7 million square feet of QTS Mega Data Centers throughout North America and Europe. In addition to hosting corporate data facilities, it lets enterprises connect to “the cloud,” and it allows various cloud systems to connect to one another.
It’s organized as a real estate investment trust (REIT), which exempts it from federal taxes in exchange for distributing at least 90% of its earnings to shareholders in the form of dividends.
The 2010s were good to data-center REITs. QTS, which went public in October 2013,has shot ahead by 180% since then — better than the S&P 500’s 109%, and the 28% performance of the Vanguard Real Estate ETF (VNQ). Plus, its dividend is still north of 3%.
QTS is one of the smaller players in its space, with a market cap of $3.94 billion, but remains acquisitive. The company picked up two data centers in the Netherlands in 2019, expanding its geographic footprint.
Fifteen analysts have sounded off on QTS within the past twelve months. There are currently 3 Hold ratings and 12 Buy ratings. The consensus among Wall Street equities research analysts is that investors should buy QTS Realty Trust Stock.
NetApp (NTAP) produces storage devices for networks. It went through the 1990s dot-com bubble under the name Network Appliance. It reconfigured itself into a hybrid cloud company during the 2010s, and it now competes with the likes of International Business Machines (IBM) and EMC. They provide a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation.
NetApp (NTAP) has focused more on software than hardware recently, creating services such as Active IQ, which allows users to gain insights via machine-learning algorithms and spend less time managing infrastructure.
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The company is being conservatively managed at the moment. CEO George Kurian is concerned about the trade war lasting and says he is managing for “a variety of outcomes.” Still, several analysts see upside in the years ahead. Morgan Stanley analyst Katy Huberty upgraded NetApp from being Equalweight to Overweight with a price target of $76. The analyst commented, “NetApp demonstrates meaningful operating leverage in economic recoveries and historically outperforms the rest of our coverage post a trough in IT spending intentions.” Cloud Data Services adoption is accelerating, and strong demand is likely to continue.
NTAP has been on the upswing for the past three months, stacking on more than 50% since late September. Still, the stock is only up about 5% for the year. With a trailing twelve month P/E ratio of 19 the stock may have plenty of runway in 2021. NTAP also brings its investors a 2.9% dividend yield.
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With driverless technology being one of the hottest investment ideas in the auto market, the best way to tap the AV revolution would be to invest in the core technology that has made self-driving cars a reality. And that foundational technology is none other than LiDAR — which basically stands for light detection and ranging.
Since its market debut on Dec. 3, Luminar’s (LAZR) stock has gained 72%. Luminar’s proprietary software designed to unlock full lidar capabilities will enhance automakers’ ability to deliver high-speed highway autonomy in commercial series production scale.
The company has landed huge contracts with Daimler AG (DDAIF), Intel Corp’s (INTC) Mobileye unit, Volvo Group and others, which are likely to solidify its standing in the LIDAR market. Volvo’s vehicles will be equipped with Luminar’s Iris lidar sensors beginning 2022.
Luminar expects to generate revenues of 15 million in 2020, which is expected to jump to $837 million by 2025. The company has recorded year-over-year revenue growth (CAGR) of 7.8%.
Northland Capital Markets analyst Gus Richard upgraded Luminar Technologies from Market Perform to Outperform with a price target of $41. The analyst commented, “LAZR will be the entrenched supplier to Mobileye by 2025.”
The company has leveraged multiple technological breakthrough innovations to develop the industry’s best LiDAR sensors. InvestorPlace senior Investment Analyst, Luke Lango, recently noted that LAZR stock might have nearly 500% upside potential over the next few years. Which means now is a good time to consider an investment in LAZR.
Where to invest $1,000 right now...
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But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.
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