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The technology industry is very big. It includes companies that make gadgets, software, wireless services, streaming services, semiconductors, and cloud computing, just to name a few. Any business that sells a product or service with a lot of technology built into it probably works in the tech sector.
Software companies are moving more and more toward a model called “software as a service,” in which customers subscribe to a program instead of buying a one-time license. This gives the software company a steady stream of income.
Semiconductor chips power all of that hardware. Semiconductor companies design and/or make CPUs, GPUs, memory chips, and a wide range of other chips that help run many of the devices we use today.
Companies in the tech sector that offer wireless services are in the telecom business. So are the companies that offer video streaming services that make it easy to watch high-quality content, and so are the companies that run these streaming services through the cloud. The best stocks in tech
Technology companies make up a lot of the world’s most valuable businesses. Here are some of the most popular and impressive tech stocks that investors should think about in the fourth quarter:
Amazon.com (NASDAQ: AMZN) is the world’s largest online store and the largest provider of infrastructure for cloud computing. Jeff Bezos, the company’s founder, left the company in July, which was the start of a new era for the tech giant.
Microsoft (NASDAQ: MSFT) is a large software company best known for its Windows PC operating system and Office productivity software. Microsoft is also the second-biggest cloud infrastructure provider after Amazon.
The iPhone, the iPad, and Mac computers are all made by Apple (NASDAQ: AAPL). Apple has a lot of repeat customers because its customers are very loyal and because it keeps adding new services.
Intel (NASDAQ: INTC) is one of the biggest companies in the world that makes semiconductors. Intel makes central processing units (CPUs) for PCs and servers as well as other types of chips used for things like artificial intelligence. The company is spending a lot of money on manufacturing and wants to make chips for other businesses.
Cisco Systems (NASDAQ: CSCO) is the biggest company that makes enterprise networking hardware that holds the internet together.
Netflix (NASDAQ: NFLX) is the leader in the video streaming business. Each year, it spends billions of dollars on content to keep its ever-growing number of subscribers interested.
Facebook (NASDAQ: FB) is the biggest social media company. Facebook, Instagram, Messenger, and WhatsApp have more than 2 billion daily active users. The company thinks that virtual reality is where it’s going.
Alphabet (NASDAQ: GOOG) and Alphabet (NASDAQ: GOOGL) is the same company. Google, the largest search engine, and Android, a popular operating system for smartphones, are both owned by Alphabet.
Some people call the stocks of Facebook, Amazon, Apple, Netflix, and Alphabet (Google) the FAANG stocks. These companies are the best at what they do, and their stocks have done well over the past few years.
Most of the time, the pandemic has been good for the tech industry. Even though competitors like Walmart (NYSE:WMT) and Target (NYSE:TGT) have stepped up their e-commerce games, Amazon has done well as more and more people buy things online. In the second quarter of 2021, Amazon grew its total sales by 27%, to $113.5 billion. This is a huge increase for such a big company. Growth is starting to slow down, but the surge in the delta variant could make people stop going to stores again.
Microsoft has also done well. As people spend more time at home, they want more collaboration software, devices, games, and cloud computing services. PC sales were still very good at the beginning of 2021, which helped the company in many ways. In its most recent quarter, Microsoft’s sales went up 21% and its net income went up 47%. Due to the pandemic, PC sales are still high, as Windows 11 is about to come out.
Early on in the pandemic, it wasn’t clear how well Apple’s pricey gadgets would sell. However, people have been buying them in droves. In the last quarter, sales of everything the company makes went up by a lot, and the core iPhone business grew by 50%. Apple’s new iPhones, which are expected to come out in September, will try to keep the momentum going.
Intel has also been helped by how much people want devices. As more people work from home, laptop sales have gone up. However, a global shortage of semiconductors and problems with the supply chain are making things harder. By putting a lot of money into manufacturing, Intel hopes to become a major player in the foundry business. At a time when relations between the U.S. and China are tense, the fact that the company is based in the U.S. is a big plus.
Advanced Micro Devices (NASDAQ:AMD), which competes with Intel, has also been doing well. AMD’s new Ryzen 5000 PC chips are better than similar Intel chips in almost every way, which will almost certainly cause Intel to lose more market share.
During the pandemic, Cisco’s customers stopped spending money on upgrades, which hurt the company. However, the company has now made a full recovery. In Cisco’s most recent quarter, sales went up by 8%, and the company’s predictions point to a strong year ahead. Cisco has grown into a big software company. Last year, it made $15 billion in software sales. WebEx, a video conferencing service made by Cisco, grew because of the pandemic, which helped the cause.
As people stayed home because of the pandemic, the number of people who used Netflix grew quickly. In 2021, the company’s growth has been much slower, and it has started to lose customers in North America, which is its main market. After the pandemic, it will be hard to compare Netflix to other services.
Other streaming services, like Disney+ (NYSE: DIS), have also been growing quickly. Now, 116 million people have signed up for Disney+, which is more than twice as many as a year ago. After AT&T (NYSE:T), which owns HBO, and Discovery (NASDAQ:DISC.A), which owns Discovery, finish their mega-deal, there will be another major competitor next year.