The technology sector has been one of the most profitable sectors in 2023, driven by the artificial intelligence (AI) boom, easing inflation and a surge in “magnificent seven.” These are the seven tech giants that dominate the market: Apple, Amazon, Microsoft, Google, Facebook, Tesla and Netflix.
However, the sector faced some headwinds in recent months due to the expectation of higher interest rates for longer than expected, which could dampen the growth prospects of tech companies. Despite this challenge, some analysts believe that the technology sector is poised to weather a prolonged phase of increased interest rates and continue to innovate and grow.
In this article, we will highlight five tech stocks that have more than doubled in the first nine months of 2023, according to a report by 24/7 Wall St. These stocks have a solid Zacks Rank #1 (Strong Buy) or 2 (Buy), suggesting their outperformance in the month ahead as well. They are Applied Optoelectronics, Inc. (AAOI), Arlo Technologies, Inc. (ARLO), Super Micro Computer, Inc. (SMCI), Nvidia (NVDA) and Vertiv Holdings Co (VRT).
Applied Optoelectronics: A Leader in Optical Devices
Applied Optoelectronics designs, develops and manufactures advanced optical devices, packaged optical components, optical subsystems, laser transmitters and fiber optic transceivers. The company serves various markets, including data center, cable television, fiber-to-the-home, telecom and consumer electronics.
With a market cap of $318.9 million, the stock has skyrocketed 407% in the first nine months of 2023. Applied Optoelectronics has an estimated earnings growth rate of 48.51% for this year. It has a Zacks Rank #2 and a Growth Score of A.
The company has been benefiting from the strong demand for its products from data center customers, especially in China. The company also expects to see growth opportunities in the 5G wireless market and the cable TV market. In addition, the company has been investing in research and development to enhance its product portfolio and expand its customer base.
Arlo Technologies: A Pioneer in Smart Home Security
Arlo Technologies is a leading provider of smart home security solutions, such as cameras, doorbells, lights, sensors and software. The company’s product design, wireless connectivity, cloud infrastructure and cutting-edge AI capabilities focus on delivering a seamless, smart home experience.
The company has an estimated earnings growth of 428.6% for this year and has a market cap of $955.6 million. The stock has surged more than 189% in the first nine months of 2023. Arlo Technologies has a Zacks Rank #2 and a Growth Score of A.
The company has been witnessing strong growth in its subscription revenue, driven by the increasing adoption of its cloud services and premium features. The company also launched several new products this year, such as Arlo Essential Indoor Camera, Arlo Essential Video Doorbell Wire-Free and Arlo Pro 4 Spotlight Camera. Moreover, the company has been expanding its partnerships with leading retailers and service providers to broaden its distribution channels and customer reach.
Super Micro Computer: A Powerhouse in Server Solutions
Super Micro Computer is a global leader in high-performance, high-efficiency server technology and innovation. The company offers a wide range of server products, such as motherboards, chassis, power supplies, storage devices and networking solutions.
The company has an estimated earnings growth of 41.8% for this year and has a market cap of $3.4 billion. The stock has soared more than 163% in the first nine months of 2023. Super Micro Computer has a Zacks Rank #1 and a Growth Score of A.
The company has been benefiting from the robust demand for its server solutions across various end markets, such as cloud computing, AI, enterprise, gaming and edge computing. The company also launched several new products this year, such as SuperBlade servers with NVIDIA GPUs for AI applications, Ultra SYS-120U-TNR servers with Intel Xeon processors for cloud workloads and BigTwin servers with AMD EPYC processors for high-performance computing.
Nvidia: A Leader in Graphics and AI
Nvidia is a global leader in graphics processing units (GPUs) and artificial intelligence (AI) platforms. The company’s products are used for various applications, such as gaming, professional visualization, data center and automotive.
The company has an estimated earnings growth of 68% for this year and has a market cap of $543 billion. The stock has jumped more than 112% in the first nine months of 2023. Nvidia has a Zacks Rank #2 and a Growth Score of A.
The company has been witnessing strong growth in its data center segment, driven by the surging demand for its GPUs for AI applications from cloud service providers, enterprises and research institutions. The company also launched several new products this year, such as GeForce RTX 30 series GPUs for gaming laptops, NVIDIA Grace CPU for data center workloads and NVIDIA Omniverse platform for 3D content creation and collaboration.
Vertiv Holdings: A Leader in Digital Infrastructure
Vertiv Holdings is a global provider of critical digital infrastructure and continuity solutions for data centers, communication networks and commercial and industrial environments. The company’s products and services include power management, thermal management, IT management, racks and enclosures, and services.
The company has an estimated earnings growth of 36.4% for this year and has a market cap of $11.9 billion. The stock has risen more than 106% in the first nine months of 2023. Vertiv Holdings has a Zacks Rank #2 and a Growth Score of A.
The company has been benefiting from the increasing demand for its solutions from various end markets, such as cloud computing, edge computing, 5G, e-commerce and healthcare. The company also acquired E&I Engineering Ireland Limited, a leading provider of electrical switchgear and power distribution systems, to enhance its portfolio and capabilities.