Best Tech Stocks for September 2024

These are some of the best tech stocks based on best value, fastest growth, and most momentum

August was off to a rough start for technology names, as industry giants such as Alphabet Inc. (GOOGL) and Amazon.com (AMZN) saw declines stemming from lukewarm earnings reports and concerns around antitrust legislation.  As a result, the technology sector, as tracked by the Technology Select Sector SPDR Fund (XLK), briefly declined 10% in the first week of August before regaining lost ground. The Russell 2000 fared slightly worse in comparison, recovering only 5% from its 10% drop over the same period.

Below is an analysis of the top tech stocks for September 2024, screened for best value, fastest growth, and most momentum. All stocks are listed on the Nasdaq or New York Stock Exchange. We also excluded stocks with a price under $5, an average daily trading volume of less than 100,000, and a market cap of less than $300 million.

All data are current as of Aug. 15, 2024.

Best-Value Tech Stocks

Value investing is an investing strategy that holds that investors can identify stocks trading below their true value. At the time the market corrects this mispricing, these undervalued names may increase in value. Investors typically attempt to identify undervalued stocks using fundamental metrics like the price-to-earnings (P/E) ratio. Typically, a lower P/E ratio signals an undervalued stock because it means the company is valued less than its fundamental value. These stocks may offer a stronger return after the market adjusts.

• Hello Group Inc.: Hello Group is a leading social networking company in China, offering platforms for users to connect, build relationships, and engage in various social activities. The company’s low valuation can be attributed to the sharp decline in the share price, reflecting decreasing revenues and profits.
• Weibo Corporation.: Weibo is a leading social media platform that allows users to create, share, and discover content, combining public self-expression with social interaction. It generates most of its revenue from advertising and marketing services, offering targeted and native ads through a mobile-first design. Like Hello Group, Weibo saw its revenues decline year-over-year, while monthly active users fell to 588 million in the first quarter of 2024, down from 598 million in the fourth quarter of 2023.
• JOYY Inc.: JOYY is a global tech company offering social platforms like Bigo Live, Likee, and Hago. These platforms allow users to live stream, create short-form video content, and play and interact across multiplayer games. The company reported a joyless first quarter of 2024, which saw net revenues decline by 6% year-over-year and revenues per paying user fall to $235 from $245 over the same period.

Fastest-Growing Tech Stocks

Growth investors believe that increases in a company’s revenue and earnings per share (EPS) can be an indicator of a strong business that has the potential to increase in value. However, focusing on just one of these two metrics can give an incomplete picture of a company’s growth potential. Circumstances unrelated to a company’s fundamental business strength—such as tax law changes, mergers, or one-off gains—can skew these figures on their own.

Investopedia uses a dual-metric approach to reach a more balanced assessment of growth companies. We equally weight the latest year-over-year (YOY) percentage growth for both EPS and revenue. This approach aims to reduce the impact of those one-time anomalies to provide a better view of a company’s true growth pattern and potential. Additionally, any companies with growth in excess of 1,000% are excluded as outliers.

• EHang Holdings Limited.: EHang is a pioneering urban air mobility (UAM) company, founded in 2014, that specializes in autonomous, eco-friendly, and pilotless aircrafts. EHang has achieved significant milestones, including obtaining certification for its EH216-S aircraft and conducting thousands of test flights globally.
• InterDigital, Inc.: InterDigital is a global research and development company specializing in wireless, video, and AI technologies. The company designs and develops innovations that power communications and entertainment products, licensing them to companies worldwide. For the second quarter of 2024, InterDigital reported all-time record revenue for the first half of the year and raised full-year revenue guidance.
• Credo Technology Group Holding Ltd.: Credo creates technology that helps data move faster and more securely across networks while using less power. Its products include special chips and cables that support very high-speed internet connections. Its solutions are used in everything from 100 gigabit to 1.6 terabit internet connections. On May 29, Credo reported revenue for the fourth quarter of 2024 of $60.8 million, an 89.4% increase from the previous year. CEO Bill Brennan highlighted the company’s record annual revenue of $193 million, driven by AI deployments.

Tech Stocks With the Most Momentum

Momentum investing is a strategy aiming to capitalize on pre-existing market trends by focusing on stocks that have outpaced their peers or the broader market on returns. This investment principal holds that stocks on an upward path are likely to continue to outperform, as long as fundamental aspects of the business, industry, or sector do not change.

Momentum investing is a common strategy applied to tech stocks because they regularly experience significant market disruptions. As companies launch new products, announce technological breakthroughs, and gain rapid popularity, investors have the potential to climb on board while these stocks are still ascending.

Here are the tech stocks with the highest total return in the last 12 months. We’ve excluded stocks with a share price under $5.

• EverQuote, Inc.: EverQuote is a leading online insurance marketplace. EverQuote reported record financial results for the second quarter of 2024, with revenue growing 72% from the previous year. The company’s automotive insurance segment saw a notable 106% increase in revenue, contributing significantly to its strong performance.
• MicroStrategy Incorporated.: Self-described as the world’s first bitcoin development company, MicroStrategy is a technology solutions provider and serial accumulator of bitcoin. For second quarter 2024, MicroStrategy acquired 12,222 bitcoin, bringing its total holdings to 226,500.
• MoneyLion, Inc.: MoneyLion is a leading financial technology company offering a comprehensive consumer finance app, an embedded finance platform for businesses, and a media arm delivering personalized financial content. 

Advantages of Tech Stocks

Growth potential

Tech stocks, particularly those in emerging areas, are known for experiencing some of the sharpest growth of any publicly traded company. Anticipating this, investors have sought periods in which the sector underperforms to invest heavily, as they expect significant growth over the long term.

But growth among tech stocks can vary dramatically. Many of the larger firms have limited growth potential because their market saturation and capitalization are already very high. Small-cap or penny tech stocks that experience technological breakthroughs or suddenly become incredibly popular may have periods of massive growth. Unusually, some of the biggest names in tech—including Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), and Alphabet Inc. (GOOGL)—have continued to grow at significant rates.

Advanced innovation

Tech trends are always changing, with companies aiming to capitalize on the latest technology and to guide and follow developments in innovation. This makes the sector primed for breakthroughs. One of the most recent major trends to sweep the tech sector has been AI-related technologies, which are increasingly integrated into companies across many industries and sectors. To the extent that some tech companies continue to play a role in making this possible, they stand to benefit from the ongoing AI trend.

Disadvantages of Tech Stocks

Fluctuations in the tech sector

Tech stocks are known for their high volatility, where rapid technological changes and competitive pressures can lead to significant price fluctuations. They often carry high valuations based on growth expectations, making them susceptible to market corrections if they fail to meet these projections. Furthermore, regulatory challenges and geopolitical tensions can impact the sector, introducing additional risks and uncertainties for investors.

Trends shift quickly

The sharp gains of many tech firms can prove tempting to investors who may not be well-versed in the technologies themselves. With rapid innovation characterizing the sector, trends and prospects shift very quickly as well. Investors who are unprepared for this pace or who lack knowledge of the fundamental strengths of different tech companies may find themselves following a trend that has already changed.

Advantages

• Growth potential

• Advanced innovation

Disadvantages

• Tech sector turbulence and rich valuations

• Investors may be left behind with rapidly shifting trends

The Bottom Line

The tech sector’s performance in 2024 is poised to be significantly influenced by advancements in AI, which is expected to drive long-term growth. The adoption of AI, along with ongoing digitization and cloud computing, offers promising opportunities, particularly for companies involved in semiconductor production and cloud software services.  However, the macroeconomic environment will also play a key role in determining the sector’s short-term performance, with the potential for volatility depending on interest-rate policies and economic conditions​.

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As of the date this article was written, the author does not own any of the above securities.

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