American technology stocks have performed remarkably in recent years and continue to dominate a considerable part of the overall market. With market values in the trillions, many of these companies are part of the so-called ‘Magnificent Seven’, which are still growing. This dynamic development is also reflected in the US stock market, which recorded an increase of over 3% in the second quarter of 2024.
Of particular note is the performance of large companies, which outperformed the market in 2024. The large-cap market of the 500 largest companies achieved annual growth of 4.4% in the second quarter, bringing the annual return to over 15%. In contrast, the small-cap market declined by 3.3%, resulting in a modest annual return of 1.6%.
However, James Demmert of Main Street Research emphasizes that not all technology stocks are equally profitable. Investors should focus on companies that can generate consistent revenue, especially in the face of economic uncertainty.
According to the Information Technology and Innovation Foundation, the IT sector plays a central role in the growth of the US economy, accounting for almost a third of the economic increase. The US is also the largest tech market in the world, accounting for a third of the global IT market. The median annual salary for jobs in the IT sector was $104,420 in May 2023, while 108,503 college graduates earned degrees in computer and information science in 2022, an increase of 3.5% year-over-year.
In 2023, technology trends were dominated by electrification/renewables and generative AI. Searches for generative AI increased by 700%, accompanied by significant investments. Despite a decline in global IT investments, electrification and renewables continued to attract capital. These sectors also have a high number of job openings, signaling long-term growth potential.
For 2024, Deloitte predicts a cautious recovery in the technology industry in light of macroeconomic uncertainties. According to Deloitte’s Q4 2023 report, 62% of technology executives view the industry as ‘healthy’, with growth expectations particularly in the areas of cybersecurity, cloud computing and artificial intelligence. Generative AI is expected to have a significant impact on enterprise software and increase operational efficiency by the end of 2024. At the same time, regulations in the EU and the USA on data protection, sustainability and AI ethics pose ongoing challenges.
Based on the analysis of tech ETFs and online rankings, we have compiled a list of 13 American tech stocks that are least affected by short sellers. This selection is based on the assumption that mimicking the top stock picks of the best hedge funds leads to market outperformance.
Microsoft Corporation, a leading provider of cloud and AI solutions, achieved remarkable success in the last quarter, despite a slight revenue correction in the cloud business. There were also positive reviews for the integration of Copilot AI and the resulting revenue growth in various business areas.
Hedge funds such as the Bill & Melinda Gates Foundation Trust hold a significant number of Microsoft shares, underscoring the continued appeal of this tech giant among investors.
Will tech stocks recover in 2024
Table of Contents
American Technology Stocks: A Dominant Force in the Market
The technology sector has been a driving force in the US economy, with American technology stocks performing exceptionally well in recent years. With market values in the trillions, many of these companies are part of the so-called ‘Magnificent Seven’, which continue to grow and dominate a considerable part of the overall market. This dynamic development is also reflected in the US stock market, which recorded an increase of over 3% in the second quarter of 2024.
Index Performance
The NASDAQ-100 Technology Sector Index (NDXT) is a key benchmark that tracks the performance of technology stocks listed on the NASDAQ exchange [[1]]. Similarly, the S&P North American Technology Sector Index provides investors with a benchmark that represents U.S. securities classified under the GICS information technology sector [[2]]. Both indices have shown significant growth in recent years, with the large-cap market of the 500 largest companies achieving annual growth of 4.4% in the second quarter, bringing the annual return to over 15% [[3]].
Large-Cap vs Small-Cap Performance
The performance of large companies has been particularly noteworthy, outperforming the market in 2024. In contrast, the small-cap market declined by 3.3%, resulting in a modest annual return of 1.6%. This highlights the importance of focusing on companies with consistent revenue growth, especially in times of economic uncertainty.
The Role of IT in the US Economy
The IT sector plays a central role in the growth of the US economy, accounting for almost a third of the economic increase. The US is also the largest tech market in the world, accounting for a third of the global IT market [[4]]. The median annual salary for jobs in the IT sector was $104,420 in May 2023, while 108,503 college graduates earned degrees in computer and information science in 2022, an increase of 3.5% year-over-year.
Technology Trends
In 2023, technology trends were dominated by electrification/renewables and generative AI. Searches for generative AI increased by 700%, accompanied by significant investments. Despite a decline in global IT investments, electrification and renewables continued to attract capital. These sectors also have a high number of job openings, signaling long-term growth potential.
Outlook for 2024
For 2024, Deloitte predicts a cautious recovery in the technology industry in light of macroeconomic uncertainties. According to Deloitte’s Q4 2023 report, 62% of technology executives view the industry as ‘healthy’, with growth expectations particularly in the areas of cybersecurity, cloud computing, and artificial intelligence. Generative AI is expected to have a significant impact on enterprise software and increase operational efficiency by the end of 2024.
Short Selle Resistance
Based on the analysis of tech ETFs and online rankings, we have compiled a list of 13 American tech stocks that are least affected by short selling. These stocks have demonstrated strong revenue growth and are well-positioned to continue their upward trend.
American technology stocks have proven to be a dominant force in the market, with many companies continuing to grow and dominate a considerable part of the overall market. As the IT sector continues to play a central role in the growth of the US economy, investors would do well to focus on companies with consistent revenue growth and strong industry trends.
References:
[1] NASDAQ-100 Technology Sector Index (NDXT)
[2] S&P North American Technology Sector Index
[3] Tech Stocks
[4] Information Technology and Innovation Foundation
Best tech stock to Buy Now
American Technology Stocks: A Dominant Force in the Market
The technology sector has been a driving force in the US economy, with American technology stocks performing exceptionally well in recent years. With market values in the trillions, many of these companies are part of the so-called ‘Magnificent Seven’, which continue to grow and dominate a considerable part of the overall market. This dynamic development is also reflected in the US stock market, which recorded an increase of over 3% in the second quarter of 2024.
Index Performance
The NASDAQ-100 Technology Sector Index (NDXT) is a key benchmark that tracks the performance of technology stocks listed on the NASDAQ exchange [[1]]. Similarly, the S&P North American Technology Sector Index provides investors with a benchmark that represents U.S. securities classified under the
