Finance

Every Ins And Outs You Need To Know About Investing In Tech Stocks

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Investing

Tech stock has evolved over the last two decades & holds the promise to continue running for the coming decade. With the formation of hundreds of companies, the field has widened & become the star of the market.

What Are Tech Stocks?

Tech stocks are all the stocks related to the sale or service of any technological product.

Tech stocks are not only involved in technological goods; they also contain research purposes, distribution & tech-based services. Tech stocks also include hardware, software, the connecting platform of this hardware & software as well.

From making computer parts to the antivirus that you use & the company that sells these to you, all of them are parts of tech stocks.

Tech stocks have maintained an upward trajectory in the global market for a significant amount of time. It generated 34.28% profit in 2017 alone; that was the highest of that fiscal year.

How COVID-19 Affected Tech Stocks

The outbreak of COVID-19 stunned the entire world. It has affected every aspect of life & business.

The stock market has also faced a tragic downfall. However, the tech stocks were invulnerable even though the pandemic hit severely.

Wondering why? Let’s take a look why?  Even before the COVID-19 hit the world, the tech stocks were outperforming the market. The pandemic has, in some cases, even sped up the growth of the potential value of these stocks. People confined in the houses depend mostly on online services.

Streaming sites like Netflix, Amazon Prime, and Disney+ have shown enormous stock market growth.

Students are attending classes and many holding important business meetings online. You probably are doing your grocery shopping & financial transaction online too. Hence, the gap between tech and other stocks has widened.

You can know more about the growth and investment opportunities in recent tech stock by following popular financial advisors like Teeka Tiwari and Jeff Brown. If you want to stay up to date about their strategies and predictions on tech stocks, you can check out nobsimreviews.com review.

Tech Stocks Analysis

There are some benchmarks available to analyze and even predict a stock’s performance. You can analyze a stock by using those benchmarks & find out if it’s worthy of investing.

If you are willing to invest in a renowned project or company, it will be the safest play for starters. But you can still be at a loss if you don’t analyze correctly.

To do so, use the price-to-earnings ratio to test the market value of the stock properly. All you need to do is find the share price & then divide it by per-share earnings. The higher the value, the better the stock.

If you invest in new companies or startups, the price-to-earnings ratio won’t help you to properly evaluate. In that case, focus on revenue growth. If you find the company has a firm prospect, go for it.

Usually, a company’s expense increases with a potential prospect. But if you notice the spending is more compared to the revenue percentage, something isn’t right there. Avoid investing in such risky companies.

Overall, don’t invest if you are not confident. Tech stocks are volatile and have certain risks as well. You have to analyze correctly the available success rates of the stocks.

10 Promising Tech Sectors to Invest

Now that you know what tech stock is and how it works, let’s take a look at the 10 most promising tech stocks in 2020

1. Computer & Software Firms

The use of computers increased after 2000. When the price came down, more & more people started buying these. Today, about 74% of Americans have a personal desktop/laptop.

The ratio has increased twice within the last 12/13 years. That shows the potential this sector holds. Intel & Ryzen are the dominating brands in this sector.

2. Artificial Intelligence(AI)

Artificial Intelligence holds so much promise in making our lives more relaxed. Already the experts are using AI in critical surgeries, security management, spacecraft maintenance. The day is not far when you will see an AI-based grocery shop.

Amazon’s Alexa & IBM’s Watson has gained much popularity in this sector.

3. E-Commerce

Online shopping & the retail business has emerged as a wonder in recent years. Thanks to the pandemic, people are now using e-commerce more than ever to conduct financial transactions.

The introduction of e-commerce has brought a revolution in the banking sector. Amazon, Ali Baba, etc. are the prominent figures in this sector.

4.  Streaming Platforms

People staying at home are roaming through online platforms for recreation. Streaming platforms are the perfect tonic in this pandemic.

As a result, Netflix, Amazon Prime, Disney+, etc. have seen a massive upward stock trajectory. Netflix got nearly 16 million new paid subscribers, thanks to the pandemic.

5. Cloud Infrastructure

From attending online classes to conducting online meetings, you need a bufferless internet connection. Cloud computing services ensure that you can use the internet even from remote areas. Also, to avail of the telemedicine facilities, this service is pivotal.

6. Smartphones

Smartphone manufacturing brands like Apple, Samsung, One Plus have seen the huge demand.

Their stock shares have gone up too, as now people are more in need of smartphones to keep connected.

7. Virtual Currency

Bitcoin has helped thousands of people by enabling them to open bank accounts. The concept of instant & transparent financial transactions has been a revolution in terms of cryptocurrencies.

8. Internet

The popularity of Google, MSN, Bing, Twitter, Yahoo, etc. need no mentioning. Investing in these stocks is almost a confirmed return.

9. Cybersecurity

With more people staying indoors & using the internet for most of their work, cybersecurity is of paramount importance. To ensure safe browsing & to protect people and businesses from malware and other malicious acts, the importance of cybersecurity has been greatly enhanced.

10. Social Media

People are using social networking platforms for multiple purposes. Many startup companies get promoted through Facebook, Instagram, Snapchat, etc.

Digital advertising subscriptions are two of the primary approaches to these social media platforms. Besides, people remain close to their families, friends, colleagues, and neighbors through these platforms.

Final Thoughts

Tech stocks used to be speculative picks once, with high returns or nothing at all. That day is long gone. Now it’s one of the most promising sectors which holds substantial profit in return, given any circumstance. The COVID-19 outbreak is its perfect example.

However, take your time while analyzing a stock. Before investing, be well aware of the business model of the farm, and risks involved, etc. Try to invest in companies that offer dividends initially.

Raj Hirvate
Hi, I'm Raj Hirvate and I am a Tech Blogger from India. I like to post about technology and product reviews to the readers of my blog. Apart from blogging i'm a big Anime fan I Love Watching Naruto, One piece and Death Note.

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