The Best Tech Stocks to Buy

Investors seeking white-hot growth in the past decade or so could do no better than investing in the best tech stocks.

Try to list some of the biggest investing megatrends in recent memory; you'll find it difficult to think of anything that doesn't involve the information technology sector.

Semiconductors. Big data. The Internet of Things. Cloud computing. Machine learning. Artificial intelligence.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Technology investing is now almost synonymous with growth investing. The sector has been the top performer — by leaps and bounds — in the past decade. It's responsible for five of the market's 10 top-performing stocks during this time.

If you think that outperformance will continue, and you want to stake your own claim in the sector, read on.

We'll explore the information technology sector, including how it's defined, why investors seek exposure to it and how to find the best tech stocks to buy.

What are tech stocks?

You can typically guess a firm's sector based on a gut feeling. If a business has mining operations, it's probably a materials stock. If a company's predominant business is banking services, it's probably a financial stock.

But the information technology sector is difficult to hammer down on vibes alone, for two reasons.

In late 2018, the Global Industry Classification Standard (GICS) — a framework used by major index providers to classify public companies — created the communication services sector.

The problem? Communication services are made up of many companies that were once considered technology firms. Adding to the confusion, a few of its components came from other sectors.

At one time, Facebook parent Meta Platforms (META) and Google parent Alphabet (GOOGL) were tech stocks. Today, they're communication services stocks.

A second factor is that companies in every sector are increasingly reliant on technology. Industrial firms use automation technology. Retailers might generate huge chunks of their revenue via websites.

This sometimes blurs the lines between companies that belong to the tech sector and those that are simply tech-reliant. The best way to understand the "tech stocks" umbrella is to read it from the GICS itself (PDF).

Briefly, the tech sector includes companies that: provide services related to the sector, such as information technology, systems integration and electronic data processing; produce and develop software for business or consumer markets; distribute technology hardware; and make semiconductors.

Why do investors buy technology stocks?

We gave away the plot a couple of paragraphs ago: "Companies in every sector are increasingly reliant on technology."

No matter where you look or what you do, technology is a bigger part of your day, whether you're at home, at work or out enjoying the world. Everything from health care records to groceries involves microchips, software, artificial intelligence and the internet.

There's no reason to believe that trend will change soon.

"To a large degree, technology is impacting all sectors of the economy in all walks of life," says Terry Sandven, chief equity strategist with U.S. Bank Asset Management. "Companies are looking to get bigger, faster and stronger. They're not doing that through hiring more people. They're doing that through technology spending."

It's no wonder that technology has been an engine of growth for years.

Over the trailing decade through June 2025, tech stocks have been the best sector by a country mile, at 20.9% average annual returns. That's a little more than 7 percentage points of outperformance against the S&P 500 and 8.8 points better than the second-best sector (consumer discretionary).

Another data set showing how dominant technology has been is a chart of S&P 500 sector performance over a five-year rolling period, provided by Standard & Poor's (PDF). That chart shows the technology sector has been tops in each of the past eight years.

Even if you don't explicitly seek tech sector exposure, there's a good chance your portfolio is chock-full of it.

Thanks to mega-caps such as Apple (AAPL) and Microsoft (MSFT), nearly 32% of the S&P 500 Index's weight is assigned to the information technology sector. Add in tech-like communication services stocks, and you're looking at more than 41%.

None of that considers tech-heavy companies from other sectors, such as consumer discretionary giants Amazon (AMZN) and Tesla (TSLA).

That means if your entire portfolio were simply shares of an S&P 500 index fund, almost a third of your exposure would be to the information technology sector, and more than 40% would be to tech and tech-adjacent stocks.

The general idea goes for anyone investing in a wide variety of broad-market index funds, not just those tethered to the S&P 500.

How to find the best tech stocks to buy

Given the variety of reasons you might invest in the sector, we're not going to assume we know exactly what you want out of a tech stock. But we can help you start your search with a basic quality screen.

To get to the following list of the best tech stocks to buy, we've looked for technology-sector firms:

Within the S&P 1500: The S&P 1500 is made up of the S&P 500, the S&P MidCap 400 and the S&P SmallCap 600. In other words, our search will include a wide variety of large- and midcap stocks, as well as the market's strongest small-cap stocks.

With a long-term estimated earnings-per-share growth rate of at least 15%: Because we're looking for tech stocks to invest in, not just short-term trades, we want to set a high bar for earnings growth across several years. (Remember that expectations aren't a guarantee of results.)

Are expected to grow revenue by at least 15% annually in the next two years: This helps us look for companies that aren't just going to achieve higher earnings, but sales growth, too.

With at least 10 covering analysts: we'd like to look at stocks on Wall Street analysts' radars, which makes it more likely that there will be more reporting and insights on these companies. The more research we have at our disposal, the better informed our decisions will be.

With a consensus Buy rating: A stock must have an average broker recommendation of 1.75 or less within S&P Global Market Intelligence's ratings scale.

S&P Global Market Intelligence converts analysts' ratings into a numerical scale. Anything with a score of 2.5 or lower is considered a Buy.

Every stock that made the list has a score of 1.75 or lower, which is considered a Buy with strong conviction.

Related content

• If You'd Put $1,000 Into Nvidia Stock 20 Years Ago, Here's What You'd Have Today
• Is It Too Late to Invest in Bitcoin?
• 30 Stocks That Could Rally 30% or More