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The Top Tech Stocks of March 2024
Microsoft Corporation (MSFT)
Market Cap
$3.0 trillion
Dividend Yield
0.8%
10-Year Avg. Annualized Return
28.7%
$3.0 trillion
0.8%
28.7%
Why We Picked It
Microsoft was founded in 1975 by Bill Gates and Paul Allen in Albuquerque, N.M. The company revolutionized computing at the birth of the industry by creating some of the first software that made personal computers accessible to regular people. MSFT grew by leaps and bounds in its early days—often in stiff competition with Apple—and it’s continued growing in more recent years, even after the exit of its founders.
Apple Inc. (AAPL)
Market Cap
$2.6 trillion
Dividend Yield
0.6%
10-Year Avg. Annualized Return
26.1%
$2.6 trillion
0.6%
26.1%
Why We Picked It
Apple was founded in Los Altos, Calif., by Steve Jobs and Steve Wozniak in 1976. From humble beginnings in Jobs’ family garage, Apple has grown into the most valuable public company on earth by market capitalization.
In fact, it’s one of just a small handful of companies that’s valued in trillions of dollars. That makes it so big it can be difficult to avoid when investing. The company currently represents more than 6% of the S&P 500 by weight, meaning that just about any index fund you invest in will own shares in this tech giant.
NVIDIA Corp (NVDA)
Market Cap
$2.2 trillion
Dividend Yield
0.0%
10-Year Avg. Annualized Return
69.8%
$2.2 trillion
0.0%
69.8%
Why We Picked It
NVIDIA was founded in 1993 to produce graphic cards for the burgeoning personal computer market. Almost 30 years on, the company remains an integrated circuit maker, producing chips that support everything from computers to phones and game consoles. There’s a good chance the device you’re reading this article on right now employs a NVIDIA chip—even if most of the NVIDIA-powered smartphones are obsolete today.
Alphabet Inc. Class A (GOOGL)
Market Cap
$1.6 trillion
Dividend Yield
n/a
10-Year Avg. Annualized Return
15.8%
$1.6 trillion
n/a
15.8%
Why We Picked It
Perhaps best known as the parent company of Google, Alphabet was created as part of a 2015 restructuring. Google, its crown jewel and also predecessor, was founded in 1998 in Menlo Park, Calif., as a project led by Sergey Brin and Larry Page at Stanford University. In the beginning, Google was a humble search engine, but today it and its parent company have grown to become online advertising and web services behemoths.
Alphabet’s other claim to fame is the scary amount of data it collects on users. For users who don’t opt out, Google collects data on everything from who they are and where they go to what they like and what they do online.
Meta Platforms Inc. (META)
Market Cap
$1.3 trillion
Dividend Yield
0.4%
10-Year Trailing Return
21.4%
$1.3 trillion
0.4%
21.4%
Why We Picked It
The company formerly known as Facebook is now named Meta Platforms to emphasize its embrace of the so-called metaverse. Facebook was originally founded by Mark Zuckerberg and a small cadre of Harvard classmates in his dorm room in 2004.
Before its name change, META had accumulated a market capitalization of over $1 trillion, built on the success of the Facebook social network and wildly popular subsidiaries like Instagram and WhatsApp. The firm is attempting to pivot its business toward the promise of the metaverse and other Web3 technologies—and away from massive controversies surrounding the Facebook social network.
Broadcom Inc. (AVGO)
Market Cap
$631 billion
Dividend Yield
1.6%
10-Year Return
39.5%
$631 billion
1.6%
39.5%
Why We Picked It
Headquartered in San Jose, Cali., Broadcom is one of the oldest and largest semiconductor manufacturers. The company began as a division of Hewlett-Packard in 1961, and was spun off as Agilent Technologies in 1999. The current company is the product of a 2016 merger between Broadcom Corporation and Avago Technologies.
Today Broadcom specializes in chips for wireless communications, digital set-top boxes and networking hardware used in data centers and cloud computing. The company’s plans for future growth are focused on artificial intelligence applications, SIP manufacturing and cybersecurity.
Taiwan Semiconductor Manufacturing Company (TSM)
Market Cap
$606 billion
Dividend Yield
1.5%
10-Year Avg. Annualized Return
25.8%
$606 billion
1.5%
25.8%
Why We Picked It
Taiwan Semiconductor Manufacturing Company could be the biggest tech company you’ve never heard of. Founded in 1987, Taiwan Semi is the world’s largest independent manufacturer of semiconductor chips and makes more than 11,000 products. The company’s shares trade on both New York and Taiwan stock exchanges.
ASML Holding NV (ASML)
Market Cap
$386 billion
Dividend Yield
0.7%
10-Year Avg. Annualized Return
28.4%
$386 billion
0.7%
28.4%
Why We Picked It
ASML is a Netherlands-based company that designs and manufactures the machinery used by companies that make microchips. The company is a major supplier to two other firms on our list, Taiwan Semiconductor and Samsung. In fact, ASML has a near monopoly on making the photolithography machines employed by the global semiconductor industry, giving it an absolutely indispensable role in the global microprocessor supply chain.
Tencent Holdings (TCEHY)
Market Cap
$331 billion
Dividend Yield
0.9%
10-Year Avg. Annualized Return
9.1%
$331 billion
0.9%
9.1%
Why We Picked It
Tencent is a Chinese holding company headquartered in Shenzhen. The company is technically a conglomerate, but it’s best known for owning instant messaging app QQ and social media site WeChat, the world’s third largest social network, with more than 900 million daily active users. Tencent also owns a large stake in North Carolina-based Epic Games—the makers of the wildly popular game Fortnite. Its stock trades on the Hong Kong and Nasdaq exchanges.
Oracle Corp. (ORCL)
Market Cap
$305 billion
Dividend Yield
1.4%
10-Year Return
12.6%
$305 billion
1.4%
12.6%
Why We Picked It
Oracle is a multinational software corporation that specializes in database applications and cloud computing. Founded by Larry Ellison in 1977, today Oracle is among the biggest software developers in the global market. The company’s software and hardware applications have powered the rise of the internet for more than four decades.
*All data is sourced from StockRover, current as of March 6, 2024.
Types of Tech Stocks
Each stock market sector can be broken down into several industries and sub-sectors. The tech sector is generally segmented into the following sub-sectors:
- Hardware. Companies like Taiwan Semi and NVIDIA manufacture physical products purchased by other manufacturers or consumers. Hardware can range from the microchips used in mobile devices to computing products bought by consumers.
- Software. Companies that develop and sell intangible computer programs or digital services are software producers. These pieces of software range widely, from social media, messaging or networking websites to software-as-a-service (SaaS) and cloud computing.
Many tech companies are active in both hardware and software. Alphabet, for example, manufactures devices like phone and home assistants while also offering its Google search engine and a full suite of online productivity tools.
Advantages of Investing in Tech Stocks
Growth companies boost returns. Buying tech stocks lets investors dial up the risk in their portfolios to increase their returns. While risk certainly cuts both ways, buying fast-growing tech names is a very effective way of boosting returns in a low interest rate environment.
Constant innovation. Tech companies live on the cutting edge of innovation. Owning shares lets investors participate in gains from breakthroughs that shape the computing and internet products consumers use everyday.
Strong demand from indexing. Tech companies now compose over 20% of the stock market index. With hundreds of billions of dollars pouring into index funds each year, that helps sustain growth for shares of the largest tech companies.
Risks of Investing in Tech Stocks
Low dividends. Most technology companies pay minimal dividends. Tech companies in the S&P 500 average a dividend yield under 2%. Many of these companies forego dividends to reinvest in their future growth.
The biggest gains may be over. The biggest tech companies have already experienced explosive growth, and the best time to invest in them may have passed. Investors may be able to achieve higher returns by investing in smaller firms, though that introduces the risk of determining how to pick the biggest winners.
Disruption. While companies that innovate can generate big profits, they may also face disruption of their business by new players with a stronger game.
Shifting regulatory environment. Regulators can change the landscape for emerging technologies rapidly when things go wrong. Data breaches, revelations about data collection and other headlines spur regulators to pass new laws and regulations that can impede future tech sector growth.
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How to Buy Tech Stocks
Investors who want to buy tech stocks can do so in a brokerage account or an individual retirement account (IRA)—and, in some cases, a 401(k). If you’re just beginning your investing journey or looking for a new way to trade, check out our list of the best online brokers and the best investment apps.
Investing in individual stocks isn’t like buying an index fund. When buying individual stocks, it’s critical for investors to research companies and assess their financial circ*mstances before investing. Individual stocks can be very risky, and you need to be aware of the risks before you buy.
Read More: How To Buy Stocks
Instead of buying individual stocks, many financial advisors recommend that investors diversify, using investments such as an exchange-traded fund (ETF) or index fund. If you want to go this route, you can check out Forbes Advisor’s list of best total stock market index funds or use fund screening tools available on your investing platform to find the best options for you.
The author owned shares of Apple Inc. when this article was published. He held no positions in the other securities discussed in the post at the original time of publication.
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