The tech industry is poised for a robust performance in 2025 with growing consumer demand across major end-use sectors, increasing adoption of advanced technologies such as generative AI, and surging IT spending.

With the industry’s promising prospects, it could be wise to invest in fundamentally sound tech stocks QUALCOMM Incorporated (QCOM), Zoom Communications Inc. (ZM), and F5, Inc. (FFIV), having high profit margins.

According to CTA’s U.S. consumer technology one-year industry forecast, retail revenues in the U.S. consumer technology industry are projected to grow 3.2% from the prior year to $537 billion in 2025. This reflects consumers growing reliance on tech products, including smartphones and laptops.

Businesses across all dimensions are adopting the latest technologies, boosting the demand for innovative software and applications, resulting in surged IT spending. Gartner projects worldwide IT spending to total $5.61 trillion in 2025, indicating an increase of 9.8% from 2024, where spending on software and IT services is expected to grow at 14.2% and 9% over the same year.

Further, AI being a common link amongst all technology trends and revolutions, the industry is poised for a strong rebound in 2025 after a turbulent 2024. Companies are strategically redirecting investments toward AI initiatives to enhance their operations and capabilities and reduce costs.

Business Research Company expects the information technology market to expand to reach around $13.18 trillion by 2029, exhibiting growth at a CAGR of 8.2% driven by digital transformation, globalization of IT services, cybersecurity concerns, and e-commerce evolution.

Investors could capitalize on the attractive industry trends and invest in affordable tech stocks with attractive profit margins. Considering the conducive trends, investing in fundamentally strong tech stocks QCOM, ZM, and FFIV could be wise.

Let’s discuss the fundamentals of these stocks in detail:

QUALCOMM Incorporated (QCOM)

QCOM engages in developing and commercializing foundational technologies for the wireless industry globally. It operates in three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).

QCOM’s trailing-12-month gross profit and EBIT margins of 56.21% and 26.32% are 11.2% and 407.7% higher than the respective industry averages of 50.56% and 5.18%. Likewise, the stock’s trailing-12-month net income margin of 26.03% is significantly higher than the industry average of 3.84%.

On January 17, 2025, QCOM announced a quarterly cash dividend of $0.85 per common share. The dividend will be paid on March 27, 2025, to stockholders of record at the close of business on March 6, 2025.

QCOM has paid dividends for 21 consecutive years. The company pays a $3.40 per share dividend annually, which translates to a 2.07% yield on the current share price. Its four-year average dividend yield is 2.11%. The company’s dividend payments have grown at a CAGR of 7.2% over the past three years.

For the fiscal 2024 fourth quarter that ended September 29, 2024, QCOM reported total revenues of $10.24 billion, up 18.7% year-over-year. The company’s non-GAAP operating income rose 31.4% from the previous year’s quarter to $3.51 billion. Also, QCOM’s non-GAAP net income and non-GAAP EPS were $3.04 billion and $2.69, up 33.3% and 33.2% from the prior-year quarter, respectively.

According to the company’s guidance for the fiscal year 2025 first quarter, QCOM projects revenues between $10.50 billion and $11.30 billion. Its non-GAAP EPS is expected to be between $2.85 and $3.05.

Analysts expect QCOM’s revenue and EPS for the first quarter (ended December 2024) to increase 9.7% and 7.6% year-over-year to $10.88 billion and $2.96, respectively. Further, the company has surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is remarkable.

QCOM’s stock has gained 6.6% over the past month and 9.4% over the past year to close the last trading session at $167.27.

QCOM’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

QCOM’s stock has an A grade for Quality. It also has a B grade for Value. Within the Semiconductor & Wireless Chip industry, QCOM has topped among the 90 stocks.

Click here to access additional ratings of QCOM (Stability, Momentum, Sentiment, and Growth).

Zoom Communications Inc. (ZM)

ZM internationally provides a unified communications platform. The company provides Zoom Meetings, which offers HD video, voice, chat, and content sharing; Zoom Phone, an enterprise cloud phone system; and Zoom Chat, which enables users to share messages, images, audio files, and content on different devices.

ZM’s trailing-12-month EBIT margin of 16.74% is considerably higher than the industry average of 5.18%. Also, the stock’s trailing-12-month net income margin of 20.34% is 429.5% higher than the 3.84% industry average. Further, its levered FCF margin of 42.11% is 261.4% higher than the 11.65% industry average.

On January 16, 2025, ZM launched its redesigned Team Chat sidebar, offering users a more customizable and efficient workspace. The new sidebar design and AI enhancements for Team Chat enable users to easily navigate and customize the sidebar with enhanced features like drag-and-drop tab arrangement, advanced sorting, and filtering.

On October 9, 2024, ZM and ServiceNow (NOW) expanded their strategic alliance aimed toward smarter collaboration and increased productivity across the enterprise. The two companies’ generative AI (GenAI) technologies, ServiceNow Now Assist and Zoom AI Companion, will integrate in the first half of 2025 to offer organizations advanced workflow automation for tasks and activities.

ZM’s revenue for the third quarter that ended October 31, 2024, increased 3.6% year-over-year to $1.18 billion. Its gross profit grew 3.2% from the year-ago value to $893.66 million. The company’s non-GAAP income from operations of $457.79 million indicates growth of 2.4% year-over-year.

In addition, the company’s non-GAAP net income came in at $435.07 million or $1.41 per share, up 8.4% and 6% from the prior year’s quarter, respectively.

Street expects ZM’s revenue for the fiscal year (ending January 2025) to increase 3.2% year-over-year to $4.67 billion. Likewise, the company’s EPS for the same year is expected to increase 5.1% year-over-year to $5.47. Also, the company topped the consensus revenue and EPS estimates in all four trailing quarters.

ZM’s shares have gained 33.9% over the past six months and 12.9% over the past year to close the last trading session at $78.54.

ZM’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

The stock has a B grade for Value and Quality. Within the B-rated Technology – Services industry, ZM is ranked #13 of 78 stocks.

In addition to the POWR Ratings we’ve stated above, we also have ZM ratings for Growth, Sentiment, Stability, and Momentum. Get all ZM ratings here.

F5, Inc. (FFIV)

FFIV provides international multi-cloud application security and delivery solutions. Its distributed cloud services enable customers to deploy, secure, and operate applications in any architecture, from on-premises to the public cloud. It offers unified security, networking, and application management solutions.

FFIV’s trailing-12-month net income margin of 20.13% is 423.9% higher than the industry average of 3.84%. Similarly, the stock’s trailing-12-month ROCE and ROTA of 19.12% and 10.10% favorably compared to the industry averages of 4.37% and 2%, respectively.

On December 17, 2024, FFIV entered a strategic partnership with MinIO, the leader in high-performance Kubernetes-native object storage. The collaboration combines MinIO’s cutting-edge, scalable storage solutions with FFIV’s high-performance traffic management and security technologies to enhance AI workloads.

The collaboration will address the unique challenges of large-scale AI deployments and open vast growth opportunities for FFIV.

Also, on November 12, 2024, FFIV introduced the F5 AI Gateway to streamline interactions between applications, APIs, and large language models (LLMs) and accelerate enterprise AI adoption. This powerful containerized solution optimizes performance, observability, and protection capabilities, resulting in reduced costs.

For the fourth quarter that ended September 30, 2024, FFIV’s total revenues increased 5.6% year-over-year to $746.67 million. Its non-GAAP gross profit rose 5.8% from the year-ago value to $619 million. Also, the company’s non-GAAP operating profit of $257 million reflects a 7.1% increase from the previous year’s quarter.

Furthermore, the company’s non-GAAP net income totaled $216.94 million and $3.67 per share, up 3.9% and 4.9% over the prior year period, respectively.

As per the business outlook for the fiscal year 2025, FFIV projects total revenue growth of 4% to 5% and non-GAAP EPS growth of 5% to 7%.

Also, for the first quarter of fiscal year 2025, FFIV expects to deliver revenue in the range of $705 million to $725 million and non-GAAP EPS in the range of $3.29 to $3.41.

Street expects FFIV’s revenue and EPS for the quarter (ending March 2025) to increase 3.3% and 10.7% year-over-year to $703.63 million and $3.22, respectively. Further, the company has an impressive earnings surprise history as it has topped consensus EPS estimates in each of the trailing four quarters.

Shares of FFIV have surged 52.7% over the past six months and 47.2% over the past year to close the last trading session at $267.74.

FFIV’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

FFIV’s stock has an A grade for Quality and a B for Value. The stock is ranked #2 among the 41 stocks in the B-rated Software – Business industry.

Click here to access additional FFIV ratings for Momentum, Sentiment, Growth, and Stability.

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QCOM shares were trading at $171.45 per share on Wednesday afternoon, up $4.18 (+2.50%). Year-to-date, QCOM has gained 11.61%, versus a 3.67% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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