Tech stocks have had a pretty wild ride in the past 18 months. Things began to stabilize earlier this year, even with the biggest wild card of 2019, the U.S.-China trade war. And now, even that dark cloud seems to be lifting.
What’s more, the U.S. economy seems to be doing just fine. The jobs numbers that came out last week were bullish and so was consumer confidence.
It also looks like the trade war might be cooling off. That means no new tariffs either way on Dec. 15, and a phase-one deal may be in the offing early next year.
This is the absolute opposite side of the coin from last year. And this kind of optimism means businesses will be more likely to spend, the government gets more revenue and consumers can keep doing what they’ve been doing.
This bullish atmosphere comes at a time when we’re also seeing some of the biggest tech innovations of our lifetimes. Below are the seven best tech stocks to add to your stock stocking now. They are already going strong, and my Portfolio Grader is bullish that they’re going to carry this momentum into the new year.
Best Tech Stocks to Buy: Lattice Semiconductor (LSCC)
Lattice Semiconductor (NASDAQ:LSCC) may only have a $2.5 billion market capitalization, but it’s been a big winner in the past year.
The stock is up 170% year-to-date, which also tells you how hard it was hit when chip stocks took a thrashing last year.
It’s making strong progress on its data center and 5G base station markets, which are big growth opportunities.
LSCC is a leader in field-programmable gate arrays (FPGAs) and it was hurt by the trade war because it does a lot of business with China. Now that the war is ending, LSCC is recovering nicely.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) is an interesting company because it’s really a next-generation tech firm.
It doesn’t do computers or telecom or any of the things we usually associate with tech. It’s fundamentally all about tech for renewable energy. It’s a hardware company — and hardware is how I like to play all the major tech trends of our lifetime.
Its main business is making microinverters.
You see, when you generate renewable energy you generate direct current. But the electrical systems in a house or business run on alternating current. Inverters change the power generated to power that can be used.
In smaller uses, like homes, microinverters are used. And that’s where ENPH makes its money. And it’s really making money.
The stock is up almost 400% year-to-date and still is trading at a trailing price-to-earnings ratio below 70.
ManTech (MANT)
ManTech (NASDAQ:MANT) is fundamentally an IT firm for the intelligence community as well as the U.S. military.
If you need secure communications and state-of-the-art functionality, MANT will deliver it. Obviously, there are larger defense firms that have these capabilities, but they usually operate managing systems for the armed services.
MANT has built a niche in the intel community. And much of the intel budgets are off the books, meaning intelligence organizations often get the funding and equipment they want without having to deal with annual budget processes.
As the military retools for a digital future and an insecure world demands more intelligence efforts, MANT is very well positioned.
Plus, it’s a niche company, which means big growth is easier to attain. This year the stock is up a respectable 50%.
Axon Enterprise (AAXN)
Axon Enterprise (NASDAQ:AAXN) is the new name of the company that makes electrical weapons for personal defense, aka tasers. It also has other lines of equipment that complement these weapons for both personal and professional use.
One of their most popular products is its line of body cameras, which supplement the deployment of tasers among security personnel. Axon has also made forays into the software market for evidence management and reporting.
The stock is up 66% this year, and as the demand for new policing techniques rises around the United States, AAXN solutions will continue to grow in demand.
Universal Display (OLED)
Universal Display (NASDAQ:OLED) as its ticker implies, is all about organic light-emitting diodes (OLED). These low-power displays are in demand wherever there is a glowing screen.
And its uses are continuing grow. The new generation of smartphones are moving toward use of the technology and large-screen televisions and computer monitors are already there. We’re still transitioning from LED to OLED, but that transition is well on its way. And then we’ll have OLED screens for a long time before a replacement comes along.
The stock is up 103% this year and now that the trade war is cooling, that growth is sure to continue. As more and more companies — and households — adopt the “mother of all technologies,” trust me: That growth is just getting started.
Heico (HEI)
Heico (NYSE:HEI) is an aerospace and electronics firm that has been around since 1949.
And it’s headquartered in Hollywood, Florida. That means it was there, delivering parts and systems to the military before NASA was even formed. Plus, Heico continued to grow along with the space agency and the aerospace industry inside and outside the government.
Today, when you think about the Space Race and the private firms that are now launching rockets and satellites, you should also think about the companies that provide them with equipment and materials.
They need to be tried and tested — and above all, trusted. Few go back as far as HEI.
The stock is up 60% year-to-date, and the modern space race is just getting started.
KLA (KLAC)
KLA (NASDAQ:KLAC) is a company that supplies specialized equipment and materials to chipmakers. One of its more recent focuses is the nano-electronics industry, which is a growing sector.
Because smaller is always better when it comes to chip technology, chips are always challenged to become smaller. We’re down below 10 nanometers for new chips from the biggest chip makers — that’s about the size of 20 silicon atoms, or a millionth of a millimeter.
This nano-scale race is very important in the chip industry, and KLAC is one of the key companies helping create smaller, more powerful chips.
Now that chip stocks are recovering, KLAC stock is up 83% in 2019, and the ease in trading tensions with China could be an even bigger boost for the stock. It’s a key holding in the list of recommended high-growth investments I publish at Growth Investor.
Ultimately, better and faster hardware is what enables the better and faster tech solutions that make our daily lives run more smoothly and efficiently. That’s what I’ve got an eye on as the ultimate growth investment in 2020 and beyond.
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