The 2010s, among other things, were characterized by the rapid rise of Big Tech, which brought Wall Street its first trillion-dollar empires. Entering 2020, the five most valuable companies traded on U.S. exchanges were all tech stocks. As 2020 has progressed – despite the extreme volatility and the specter of antitrust regulation – Silicon Valley has not only become more dominant but has gone down as the standout sector in the first half of the year. Through July 7, the S&P 500 was down about 2% year to date, and U.S. News’ 10 best tech stocks to buy for 2020 were up more than 11% as a portfolio. Here’s a look at how each pick is faring.
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Parlaying competitive advantages it established in the 1990s, 2020 has been a great year for Microsoft. “We’ve seen two years’ worth of digital transformation in two months,” CEO Satya Nadella said in its last earnings report. It’s still one of the best tech stocks to buy for 2020, and the company has invested its cash brilliantly: It got into tablets with the Surface, video games with Xbox and social networks with its LinkedIn acquisition. The Windows upgrade cycle allows for guaranteed recurring revenue, as does the brilliant decision to make Microsoft Office a cloud-based subscription product. Azure, its cloud computing division that is second only to Amazon.com’s (AMZN) AWS by market share, highlights MSFT’s growth prospects, with revenue soaring 59% last quarter. Microsoft Teams, its workplace collaboration software, is seeing rapid adoption as well.
Year-to-date return: +32%
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Updated on July 7, 2020: This story was published at an earlier date and has been updated with new information.
John Divine is a senior investing reporter for U.S. News & World Report, where he’s been …