The US stock market witnessed its most horrific times in recent years during this March as the fear of the Pandemic reached the zenith. However, the pullback rally from March has been unbelievable even though the macroeconomy has not improved ever since the downfall in the stock market. If you think the overall market pullback is astounding, then the pullback of the tech stocks is even more dramatic. When the overall market has been inching close to the pre-March number, the tech stocks have reached a new all-time high.
What are the best tech stocks for 2020?
We have analyzed many tech stocks based on different parameters like P/E, dividend yield, and earning potential in the future and have come up with some of the best tech stocks to own in 2020. Here are some of our best picks considering both the fundamental analysis and near-term visibility.
- 1. Apple Inc (AAPL)
Apple has been the torchbearer when it comes not only to the tech stocks but to the overall economy. Apple has been primarily engaged in the design, manufacture, and sale of smartphones. But the revenue stream from personal computers, tablets, wearables, and accessories is steadily increasing in the recent past. Also, it is involved in related software, services, and networking solutions where the size of the pie is increasing as well.
With 5G just around the corner and mobile phones going through a renewal cycle, the revenue of Apple is going to increase steadily over the next few years. Also, the wearables market where Apple has been introducing new and innovative products will generate a steady inflow of cash flow.
With the recent stock split, it has been made more affordable to the retail investors and can go up from here as the demand for Apple stock goes up.
- 2. CISCO Systems (CSCO)
Established in 1984, CISCO Systems is one of the most established tech companies in the US. Cisco develops and manufactures networking hardware, software, and telecommunications equipment. CISCO is one of the consistent dividends paying stocks among the tech giants of Wall Street. The enterprise technology giant is also focusing on cloud computing solutions in addition to hardware that it sold to dominate in the early 2000s.
The focus on new-age technology solution would help the company relevant in current times. With a consistent track record of paying dividends and with a dividend yield of 3.57% this is one of the stocks which has a rare mix of growth and high dividend yield.
- 3. Texas Instruments (TXN)
Texas Instruments is a slightly smaller but still substantial semiconductor and electronics firm valued at about $126 billion. Texas Instruments designs and manufactures semiconductors for a wide array of uses including visual displays, wireless controllers, and portable power supplies. Texas Instruments is in our list not only because of its revenue potential in the next few years but also because of its consistent track record of paying dividends.
With a dividend yield of around 2.6%, this stock is a good bet during the market downturn as well. With over 12% revenue expansion predicted next year, it has the growth potential tech investors are eyeing for.
- 4. Facebook (FB)
Facebook is one of the leading social media companies in the world and boasts more than 2.6 billion monthly active users. On a larger base, Facebook is still growing that figure by about 8% annually. Around 2.9 billion people use either Facebook, WhatsApp, Instagram, or Messenger at least once a month. Facebook is yet to monetize some of it’s best assets especially WhatsApp and with that, the steady-state of revenue is going to continue for the next few years.
The move from traditional ways of advertising to digital ways of advertising has been increasingly getting mainstream attention and Facebook is going to be the leading beneficiary of this movement. With the steady free cash flow continuing in the next few years Facebook should be the next trillion-dollar company in US Market.
- 5. HP Inc. (HPQ)
The last stock on our list has a relatively lower market cap but has the potential to go up the ladder. HP manufactures and markets printing, computing, and other home office systems. HP is known for its amazing personal computers and workstations. With the working from home norm staying for the foreseeable future and the demand for personal computers going up, revenue should continue to grow for the next few years. Also, the dividend yield of HP should help the investor to remain invested for a longer duration during a market downturn.