5 Top Notch Technology Stocks Set To Beat Nasdaq In 2020

The tech-laden Nasdaq Composite (IXIC) has been one of the top-performing indices in 2019, with more than 33% return as of Dec 19.

Tech’s outperformance has been the major driver despite uncertainties surrounding the U.S.-China trade tiff, concerns over slowing global economic growth, the Brexit impasse and other geopolitical concerns.

Markedly, the Select Sector SPDR Technology ETF (XLK) has gained 47.7% year to date compared with the S&P 500 composite’s rally of 26.1%.

We note that robust adoption of cloud computing solutions amid ongoing digital transformation of enterprises, driven by growing use of AI and ML technologies, has been driving technology stocks this year.

Tech Sector Looks Strong Heading Into 2020

Notably, the technology sector is expected to commence 2020 on an encouraging note, following a favorable trade deal and recovery in the chip market, among other factors.

Completion of the phase one deal between the United States and China should improve business sentiments. This is expected to serve as a fundamental catalyst for technology stocks moving into 2020. Equity markets are expected to move higher owing to the deal, which would better position the global economy for growth next year.

Moreover, the global chip and semiconductor market is expected to recover in 2020The World Semiconductor Trade Statistics indicated that the global chip market is set to recover by 5.9% in 2020, after an estimated decline of 12.8% this year. Improved trade ties between the United States and China are likely to help meet the target more efficiently.

Moreover, continuous innovation in electronic devices and major breakthrough developments will continue to lead to solid adoption of wearables and smart-connectivity solutions, including smart speakers and virtual reality/augmented reality (VR/AR) devices.

Additionally, technical advancement in the telecommunication sector on accelerated deployment of 5G technology and strong efforts toward modification in Internet infrastructure should continue to act as tailwinds.

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Adam Reynolds 6 months ago Member's comment

Some good stock picks here.