Traders work on the ground at the New York Stock Exchange.
Brendan McDermid | Reuters
Tech stocks have been far from a safe bet since 2021 started its run in mid-November. Inflationary worries and fears of rising interest rates have pushed investors out of software and internet companies, sending dozens of former outperformers into correction territory.
Despite massive sales and volatility across large swathes of the tech industry, investors have made a lot of money betting on specific companies and stories. Some areas of the semiconductor market have exploded this year, as demand for processors that can speed up crypto mining, facilitate game development, and connect more devices to the internet has skyrocketed.
Fintech, cloud software and cybersecurity have also had their share of success, although buying baskets of these stocks and holding them for the year would not have been a particularly lucrative investment.
Here are the five biggest winners in 2021 among U.S. tech companies valued at $ 5 billion or more. The list excludes companies that went public this year. Prices are at the close of Thursday.
Upstart shares have risen 264% since the start of 2021, including a 171% gain in a wild three-day stretch in March.
The company uses machine learning to take out consumer loans and provides its technology to banking partners who can better target customers.
Income in the third quarter climbed 250% to $ 228 million. In addition to rapid growth, Upstart offers investors something unusual from a newly listed tech company: profits. Upstart has generated profits for five consecutive quarters, including a net profit of $ 29.1 million in the most recent period, up from $ 9.7 million a year earlier.
Upstart said in its earnings call in November that it now provides technology services to 31 banks and credit unions, up from 10 a year ago. In the third quarter, the company granted 362,780 loans, up 244% from the previous year.
CEO David Girouard said on the call the company is now moving beyond personal and auto loans and into low dollar loans for consumers with “immediate cash flow needs.”
“Our banking partners rightly feel obligated to serve low to moderate income Americans better, and we want to help them do it right,” Girouard said. “Interest in the low dollar product from our banking and credit union partners is off the charts and we hope to bring it to market before the end of 2022.”
Synaptics grew up in the heart of Silicon Valley, developing PC touchpads and scrollpads as well as biometrics. Its touch technology then found an echo with smartphones. Now, with more and more devices acting like computers, Synaptics has positioned itself at the center of the “Internet of Things” (IoT) boom.
The company’s technology can be found in connected cars, virtual reality headsets, set-top boxes, drones and gaming systems. It focuses on low power consumption for all kinds of wireless devices.
“We’ve been very successful with this company – it has exceeded our best expectations,” CEO Michael Hurlston told CNBC’s Jim Cramer in July. “I think it’s because we didn’t research what everyone was looking for. We repositioned it to target an interesting market that has turned out to be a great producer.”
Earlier this month, Synaptics completed its $ 549 million acquisition from the DSP group, which provides voice processing and wireless chipsets.
Asana CEO Dustin Moskovitz
At its peak in mid-November, Asana nearly quintupled for the year, far outpacing all other U.S. tech stocks. It’s lost almost half of its value since then, falling alongside a bunch of other high-priced cloud software stocks.
Yet the software provider that helps marketing, operations and sales teams manage projects and collaborate remotely is up 164% in 2021, thanks to revenue growth of at least 70% year-over-year. the other in the second and third trimesters.
Like Upstart, Asana went public in 2020, but its outing with investors took a few months to get started. Dustin Moskovitz, the billionaire co-founder and CEO of the company, bought along the way.
Moskovitz bought around $ 293 million in Asana shares in December, using the drop to strengthen his position. He now controls around 44% of the combined Class A and Class B shares of the company, up from 36% before the New York Stock Exchange debuts in September 2020.
Converting free users to paying customers is key to Asana’s future growth and profitability. In its third quarter earnings report earlier this month, Asana said paying customers increased from 7,000 to over 114,000, and revenues for customers spending more than $ 5,000 a year jumped by 96% compared to the previous year.
Fortinet Inc. head office in Sunnyvale, California.
Tony Avelar | Bloomberg | Getty Images
With two consecutive quarters of revenue growth exceeding 30%, Fortinet is growing at its fastest pace since 2016. A wave of ransomware attacks along with a more complex security environment created by a sudden increase in remote work has resulted in increased demand for Fortinet’s technology this past year. year.
Shares are up 133%, closing Thursday at $ 349.02. That brought the company’s market capitalization to over $ 57 billion, overtaking rival Palo Alto Networks, which is valued at $ 55 billion after its stock rose 58% in 2021.
After Fortinet better than expected earnings report and bullish forecast last month, analysts at Wedbush raised their price target from $ 350 to $ 400. One reason, cited by the company, was the company’s free cash flow, which jumped to $ 329.8 million from $ 185.7 million a year earlier.
“In a nutshell, rising Billings growth, a strong FCF and a healthy pipeline should be the winning trifecta to push this stock up,” wrote analysts at Wedbush, who maintained their buy recommendation on the stock. .
Nvidia GeForce Now on iPhone
Chipmaker Nvidia was the top performing mega-cap tech stock of the year. Shares climbed 127% in 2021, bringing the company’s market cap to $ 741 billion, the seventh highest among U.S. tech companies, behind the Big Five in tech and Tesla.
Revenue growth has exceeded 50% in each of the past five quarters, proving that Nvidia’s high-performance graphics processing units remain in high demand. Inside the data center, Nvidia’s technology boosts artificial intelligence and data-intensive workloads, while gaming systems continue to require more processing power.
Earlier this year, Nvidia released new processors specifically for crypto mining. They’ve generated $ 526 million in revenue so far, but crypto is proving to be a volatile market for Nvidia. The company said last month that product sales fell 60% sequentially from the second to the third quarter and are expected to be “very negligible” in the fourth quarter.
Investors are not expressing much concern. The stock rose more than 8% after the earnings report, largely because game processors, Nvidia’s core business, generated $ 2.76 billion in revenue, an increase of 106 % compared to last year.
“We continue to believe the long-term outlook for the company is among the best in the semiconductor industry,” Piper Sandler analysts wrote in a note after the third quarter results. They maintained their buy rating and raised their price target to $ 350 from $ 260.
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