How to Find the Best Tech Stocks to Buy

Tech stocks have generated massive returns for investors over the years, but how do you find the best ones to buy? We take a closer look here.

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(Image credit: Getty Images)

Tech stocks have generated impressive returns for investors in recent decades. To find evidence of this, look no further than the Technology Select Sector SPDR Fund (XLK), a popular exchange-traded fund that tracks the technology sector of the S&P 500. Over the past 10 years, XLK has averaged an annual total return (price change plus dividends) of 20.5%, nearly double the S&P 500's return of 12.4%.

The performance of XLK has been largely propelled by mega-cap tech stocks such as Microsoft (MSFT), Apple (AAPL), Nvidia (NVDA), Alphabet (GOOGL) and Meta Platforms (META) – all members of the Magnificent 7. The gains produced by these blue chips have been supported by transformative trends in cloud computing, artificial intelligence (AI), mobile technology and the Internet of Things (IoT).

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Tom Taulli
Contributing Writer,

Tom Taulli has been developing software since the 1980s when he was in high school.  He sold his applications to a variety of publications. In college, he started his first company, which focused on the development of e-learning systems. He would go on to create other companies as well, including that was sold to InfoSpace in 1996. Along the way, Tom has written columns for online publications such as Bloomberg, Forbes, Barron's and Kiplinger.  He has also written a variety of books, including Artificial Intelligence Basics:  A Non-Technical Introduction. He can be reached on Twitter at @ttaulli.