3 Undervalued Tech Stocks
Look beyond the tech giants for hidden opportunities.
Technology continued to significantly outperform the broader market as we exit 2020. We still wouldn’t characterize this rise as a bubble across the higher-quality, larger-cap tech names we cover, as we see robust fundamental tailwinds supporting future growth for most of our coverage, such as cloud computing, remote working, 5G network rollouts, and the "Internet of Things." However, valuations for certain names still appear unreasonable to us, and a pullback in tech stocks would likely be healthy, in our view. We struggle to identify many tech stocks trading at attractive valuations today.
As of Dec. 21, the Morningstar US Technology Index was up a whopping 46.8% year to date, vastly outperforming the U.S. equity market, which is up 19.4% year to date. Over the past three months, tech performed relatively in line with the broader market, up 13.6% compared with the U.S. equity market up 12.8%.
Brian Colello does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.