Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Technology stocks have been far from a safe bet since 2021 began its stretch in mid-November. Inflation concerns and fears of rising interest rates pushed investors out of software and Internet companies, sending many former out-competitors into the correction area.
Despite sales and volatility across large parts of the technology industry, investors have made a bundle of money by investing in specific companies and histories. Some areas of the semiconductor market increased this year, as demand increased for processors that could speed up cryptocurrency mining, aid game development, and connect more devices to the Internet.
Fintech, cloud software and cybersecurity also had their share of standouts, although buying baskets with these stocks and keeping them for the year would not be a particularly lucrative investment.
Here are the five biggest winners in 2021[ads1] among US technology companies valued at $ 5 billion or more. The list excludes companies that were listed on the stock exchange this year. Prices are from the end of Thursday.
When Upstart made its stock market debut in mid-December last year, the company was valued at around $ 1.5 billion. Just over a year later, it is a company worth 12 billion dollars.
Upstart shares are up 264% since the beginning of 2021, including a gain of 171% over a wild three-day stretch in March.
The company uses machine learning to take out consumer loans and delivers the technology to banking partners who can then better target customers.
Revenue in the third quarter increased by 250% to $ 228 million. In addition to rapid growth, Upstart provides investors with something unusual from a recent public technology company: profits. Upstart has generated earnings for five consecutive quarters, including net income of $ 29.1 million in the most recent period, up from $ 9.7 million the year before.
Upstart said in its earnings interview in November that they now provide technology services to 31 banks and credit unions, up from 10 a year ago. In the third quarter, the company provided 362,780 loans, up 244% from the previous year.
Top technology stocks in 2021
CEO David Girouard said during the conversation that the company is now moving beyond personal and car loans and into small dollar loans for consumers with “immediate cash needs.”
“Our banking partners rightly feel the pressure to better serve low- to moderate-income Americans, and we want to help them do that right,” Girouard said. “The interest in the small dollar product from our banking and credit union partners is out of the list, and we hope to bring it to market before the end of 2022.”
Synaptics was founded in 1986 and was listed 16 years later. But it took until 2020 before investors began to get excited about the stock. This year it took off, rising 189%.
Synaptics grew up in the heart of Silicon Valley, developing touch pads and scroll pads for PCs as well as biometrics. The touch technology then resonated with smartphones. Now, with more computers acting as computers, Synaptics has positioned itself at the center of the “Internet of Things” (IoT) boom.
The company’s technology is found in connected cars, virtual reality headsets, set-top boxes, drones and gaming systems. It focuses on low power consumption for all kinds of wireless devices.
“We’ve done very well with that business – it has exceeded our best expectations,” CEO Michael Hurlston told CNBC’s Jim Cramer in July. “I think it’s because we did not go for what everyone else was looking for. We repositioned it to go for an interesting market that has proven to be a major producer.”
Earlier this month, Synaptics completed its $ 549 million acquisition of DSP Group, which offers voice processing and wireless chipsets.
Asana boss Dustin Moskovitz
At the peak in mid-November, Asana was up almost fivefold for the year, far better than any other US technology stock. It has lost almost half its value since then, and coincided with a bunch of other expensive cloud software stocks.
Nevertheless, the provider of software that helps marketing, operations and sales teams manage projects and collaborate externally is up 164% in 2021, driven by year-over-year revenue growth of at least 70% in the second and third quarters.
Like Upstart, Asana was listed on the stock exchange in 2020, but it took a few months before the party with investors came out. Dustin Moskovitz, the company’s billionaire co-founder and CEO, has bought along the way.
Moskovitz bought $ 293 million worth of Asana shares in December, taking advantage of the decline to strengthen its position. He now controls around 44% of the company’s A and B shares, up from 36% before the company’s debut on the New York Stock Exchange in September 2020.
Converting free users to paying customers is the key to Asana’s future growth and profitability. In its third-quarter results report earlier this month, Asana said paying customers increased by 7,000 to over 114,000 and said revenues from customers spending more than $ 5,000 annually increased by 96% from the previous year.
Fortinet Inc. is headquartered in Sunnyvale, California.
Tony Avelar | Bloomberg | Getty pictures
With two straight quarters of revenue growth over 30%, Fortinet is expanding its fastest pace since 2016. A number of ransomware attacks coupled with a more complex security environment created by a sudden increase in telework led to an increase in demand for Fortinet’s technology this year.
The stock is up 133%, and closes on Thursday at 349.02 dollars. It has raised the company’s market value to over $ 57 billion, surpassing rival Palo Alto Networks, which is valued at $ 55 billion after the stock rose 58% in 2021.
After Fortinets better-than-expected earnings report and positive forecast last month, analysts at Wedbush raised their price target to $ 400 from $ 350. One reason, the company said, was the company’s free cash flow, which jumped to $ 329.8 million from $ 185.7 million a year earlier.
“In a nutshell, Billing’s upside growth, strong FCF and a healthy pipeline should be the trifecta to drive this stock up,” wrote Wedbush analysts, who maintained their buy recommendation on the stock.
Nvidia GeForce Now on iPhone
Chipmaker Nvidia was this year’s megacap technology stock with the best results. The stock rose 127% in 2021, pushing the company’s market value to $ 741 billion, the seventh highest among US technology companies, behind the five Big Tech names and Tesla.
Revenue growth has peaked at 50% in each of the last five quarters, proving that Nvidia’s high-performance graphics processing units are still in demand. Within the data center, Nvidia’s technology strengthens artificial intelligence and data – intensive workloads, while gaming systems continue to require more powerful processing power.
Earlier this year, Nvidia released new processors specifically for cryptocurrency mining. They have generated $ 526 million in revenue so far, but crypto is proving to be a volatile market for Nvidia. The company said last month that sales of the products plunged 60% sequentially from the second quarter to the third and are expected to be “very insignificant” in the fourth quarter.
Investors do not express much concern. The stock climbed more than 8% after the earnings report, mainly because gaming processors, Nvidia’s core business, generated $ 2.76 billion in revenue, an increase of 106% from last year.
“We continue to believe that the company’s long-term outlook is some of the best in the semiconductor industry,” analysts from Piper Sandler wrote in a note after the third quarter results. They kept the purchase rating and raised the price target to $ 350 from $ 260.
SEE: Nvidia could become a stock of $ 10 trillion a day, says Jim Cramer