In their 2022 outlook, RBC Capital Markets strategists stated, “Tech ranks the best among all sectors on our quality metrics, ranking at or near the top for all factors that we evaluated.” Also, the tech stocks powered the S&P 500 index to a monster performance in 2021.

With hybrid working arrangements becoming the new normal and businesses investing heavily in tech upgrades, the U.S. tech spending is expected to expand by 6.7% in 2022. And investors’ interest in technology stocks is evident in the iShares Global Tech ETF’s (IXN) 62.4% returns over the past year versus the SPDR S&P 500 ETF Trust’s (SPY) 26.1% gains.

Clearfield, Inc. (CLFD), Aehr Test Systems (AEHR), Focus Universal Inc. (FCUV), Ipsidy Inc. (AUID), and Trio-Tech International (TRT) were among the best performing tech stocks of 2021. So, we think one could consider adding them to one’s watchlist considering the industry’s solid growth prospects.

Clearfield, Inc. (CLFD)

CLFD in Plymouth, Minn., designs, manufactures, and distributes fiber optic management products in the United States and Internationally. The company’s products include FieldSmart, WaveSmart, StreetSmart, and CraftSmart. CLFD offers fiber and copper assemblies and designs and manufactures custom solutions for in-the-box and network connectivity assemblies specific to that customer’s product line.

In Oct. 2021, CLFD announced the addition of its new small form factor FLATdrop cable to its FieldShield fiber pathway solutions portfolio. This small form factor is a more flexible and self-supporting FLATdrop solution. The product also reduces the environmental impact of fiber deployment, can be deployed in any environment, and enables more efficient inventory storage, saving contractors and installers’ time and space.

CLFD’s revenues for its fiscal fourth quarter, ended Sept.30, 2021, increased 65.6% year-over-year to $45.24 million. The company’s gross profit grew 75.4% from its  year-ago value to $19.73 million. Its income from operations rose 154.5% from the prior-year quarter to $9.37 million, and its EPS increased 140.9% year-over-year to $0.53.

Analysts expect CLFD’s revenue for its fiscal year 2022 to be $167.6 million, representing 19.1% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 19.7% in fiscal 2021 and 22.7% in fiscal 2022. The stock has returned 219.1% in price over the past year.

Aehr Test Systems (AEHR)

Incorporated in 1977, AEHR in Fremont, Calif., is a global provider of test systems for burning-in and testing logic, optical, and memory integrated circuits and has more than 2,500 systems installed worldwide. The company’s principal products are its Advanced Burn-In and Test System (ABTS), its FOX full wafer contact parallel test and burn-in systems, its  MAX burn-in system, its WaferPak full wafer contactor, its DiePak carrier, and test fixtures.

Last month, AEHR received an order from a current silicon photonics customer for four additional FOX-NP systems to support the characterization and product qualification of new photonics-based devices. The company believes that this is a significant long-term growth opportunity for AEHR.

For its fiscal second quarter, ended Aug. 31, 2021, AEHR’s net sales increased 180.6% year-over-year to $5.65 million. The company’s gross profit grew 904.8% from its year-ago value to $2.28 million. Its net income rose 550.5% from the prior-year quarter to $696,000, and  the company’s EPS came in at $0.03.

AEHR’s revenue is expected to increase 204% year-over-year to $50.46 million in its fiscal 2022. Its EPS is estimated to grow 400% in fiscal 2021 and 28.1% in fiscal 2022. Its stock has soared 747.9% in price over the past year.

Focus Universal Inc. (FCUV)

Ontario, Calif.-based FCUV provides patented hardware and software design technologies for the Internet of Things (IoT) and 5G. The company has developed four disruptive proprietary technologies to solve the major problems facing hardware design, hardware production, software design, and network communication. FCUV operates through Focus Universal, Inc. and Perfecular Inc. (Focus); and AVX Design & Integration, Inc. (AVX).

During the third quarter, ended September 30, 2021, FCUV’s total revenue increased 16.7% year-over-year to $634,780. The company’s gross profit came in at $113,690 . Its cash grew 1,534.6% to $9.54 million for nine months ended Sept. 30, 2021.

FCUV’s stock has surged 77.6% in price over the past nine months and 115.3% over the past year.

Ipsidy Inc. (AUID)

AUID operates an Identity as a Service (Dias) platform that delivers a suite of secure, mobile, and biometric identity solutions worldwide. Identity management, and payment processing are the two segments under the company. Long Beach, N.Y.-based AUID also offers IDENTITY Â PORTAL, which allows enterprises to enroll customers using the Ipsidy portal.

AUID’s total revenues increased 2.5% year-over-year to $528,350  in the third quarter, ended Sept. 30, 2021. The company’s cash increased 145.2% year-over-year to $9.23 million for the nine-month ended Sept. 30, 2021.

AUID’s shares have gained 64% in price  over the past nine months and 204.3% over the past year.

Trio-Tech International (TRT)

Incorporated in 1958, TRT in Van Nuys, Calif., designs, manufactures and markets both front- and back-end equipment and systems used in the testing and production of semiconductors in the United States, Singapore, Malaysia, Thailand, and China. The company operates in Manufacturing; Testing Services; Equipment Distribution; and Real Estate segments.

Last month, TRT signed a joint venture agreement with a Chinese company located in Suzhou, China, with expertise in System Level Testing (SLT). The joint venture will operate a facility with a team that has advanced expertise in burn-in testing. TRT believes that this collaboration should enhance the company’s future growth.

During its fiscal fourth quarter, ended June 30, 2021, TRT’s revenue increased 29.7% year-over-year to $9.31 million. The company’s gross margin grew 67.9% from its year-ago value to $2.22 million. Its income from operations came in at $359,000, compared to a $629,000 loss from operations  in the prior-year quarter.

TRT stock has gained 110.1% in price over the past nine months and 150.9% over the past year.

Click here to checkout our Semiconductor Industry Report for 2022

CLFD shares were trading at $74.71 per share on Thursday morning, down $2.90 (-3.74%). Year-to-date, CLFD has declined -11.50%, versus a -1.79% rise in the benchmark S&P 500 index during the same period.

About the Author: Priyanka Mandal

Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...

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