June 23, 2021
The ubiquity of technology in our society has made it the most significant market globally. With the four largest tech players in the U.S. – Apple Inc. (Tii:AAPL), Amazon.com, Inc. (Tii:AMZN), Alphabet Inc. (Tii:GOOG) and Microsoft Corporation (Tii:MSFT) – all with market capitalizations at or exceeding $1 trillion each, there’s no denying technology’s impact on the economy and across every industry.
With the major (and not so major) tech players gaining even greater prominence as a result of increased reliance on their services during last year’s pandemic, tech stocks surged. In fact, the NASDAQ 100 Technology Sector Index gained 41.55% over the past 12 months. Here are a few of the somewhat less widely held players in the tech industry whose shares are nonetheless racking up double-digit gains.
CDK Global Inc. (Tii:CDK) is a leading provider of integrated data and technology solutions to the automotive, heavy truck, recreation, and heavy equipment industries serving approximately 17,000 auto, heavy truck, agriculture, construction, power sports, marine and RV dealerships throughout North America. The company, whose shares are up nearly 22% for the trailing 12 months ended June 18, 2021, recently acquired Palo Alto, Calif.-based Roadster, Inc. The acquired company provides a digital sales platform that modernizes the way consumers buy vehicles and how dealers sell them. With these additional capabilities, CDK is looking to help traditional dealerships compete with the capabilities of digital-first used vehicle marketplaces like Carvana Co. (Tii:CVNA) and Vroom, Inc. (Tii:VRM).
Imagine using augmented reality (AR) to boost productivity by sending information instantly to frontline workers in real-time, providing product demonstrations, or gaining help from experts while you are on the job. This is just one of the technologies offered by PTC Inc. (Tii:PTC). The B2B offers a range of technologies to help companies boost efficiency and lower operational costs. Industrial automation and information technology provider Rockwell Automation (Tii:ROK) believes in PTC’s technology to the degree that it acquired an 8.4% ownership stake in PTC in 2018 for $1 billion. PTC’s shares have gained some 67% for the trailing 12 months ended June 18, 2021.
Simply mentioning cloud computing will attract a wave of companies on your heels to offer the latest data monitoring and sales tracking software. Companies everywhere are investing in this technology to understand their customer base and buying trends better. The market-leading customer relationship management (CRM) platform, salesforce.com, inc. (Tii:CRM) recently expanded its product line in the financial services industry. The company recently launched Corporate and Investment Banking for Financial Services Cloud, new digital technology for investment bankers to drive efficiency, build and deepen relationships with customers, and win more deals. Shares for the cloud computing giant have gained nearly 30% for the trailing 12 months ended June 18, 2021.
Debit cards are the top payment option used by consumers, according to a 2020 study by the Federal Reserve. According to the report, which asked 1,537 consumers which payment forms they tended to use, 28% said they make payments with debit cards, with 27% using credit cards and 19% using cash. The remainder included automated clearing house (ACH) payments or other forms such as mobile payment apps. In the case of the old greenback, the percentage of consumers using cash dropped seven percentage points from 2019. These results bode good news for ACI Worldwide Inc. (Tii:ACIW), a global payment systems platform that facilitates real-time electronic payments. Its products and services are used globally by banks and financial intermediaries such as third-party electronic payment processors. The company’s shares have gained more than 39% for the trailing 12 months ended June 18, 2021.
We would be remiss if not mentioning something about the semiconductor industry. The ongoing chip shortage spotlighted the industry’s supply chain flaws while curtailing manufacturing across dozens of industries. While Cohu, Inc. (Tii:COHU) is not a chipmaker, the company is a global leader in back-end semiconductor equipment and services used to manufacture semiconductors and printed circuit boards. Robust automotive demand and continued mobility expansion with 5G proliferation contributed to Cohu reporting record first-quarter revenue of $225.5 million, an 11.4% gain quarter-over-quarter. The company’s shares have gained more than 95% for the trailing 12 months ended June 18, 2021.
So, as you look at the tech stocks in your portfolio, perhaps consider investing beyond the blue chips. You may find a hidden gem or even the next member of the $1 trillion market cap club.
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