The technology sector has significantly outperformed the rest of the market over the past year thanks to pandemic-driven changes in consumer and business behavior. The need to stay operational while distancing from others to avoid contact with the virus has led to an increased reliance on business and communications technology.

The sector’s solid performance is evident in the iShares U.S. Technology ETF’s (IYW) 44.3% returns over the past year. This compares to the SPDR S&P 500 ETF Trust’s (SPY) 15.7% gains over the same timeframe. Emerging technologies such as 5G, cloud computing, and artificial intelligence (AI) should keep driving  the sector’s performance in the coming years.

Roku, Inc. (ROKU), Applied Materials, Inc. (AMAT), and Cirrus Logic, Inc. (CRUS) are innovating quickly to drive future growth. These companies saw significant stock price gains over the past year, and we think will continue soaring this year and beyond.

Roku, Inc. (ROKU)

ROKU’s primary offering is a streaming entertainment device that can be connected to televisions. The company also offers software development kits for their device. ROKU’s stock has gained 220% over the past year.

ROKU  recently launched the Roku Streambar in the U.K.  It  has also launched the Roku Channel in the U.K. The company  recently announced that it crossed 50million-plus active accounts in 2020.

For the quarter ended September 30, 2020, ROKU  saw a rise in revenue of 73% year-over-year. The company’s gross profit grew 81% during the same period.

ROKU is expected to see 44.4% revenue growth for the quarter ended March 31, 2021 and 39.4% in 2021. Its  EPS is estimated to grow 40.5% in 2021.

How does ROKU stack up for the POWR Ratings?

A for Trade Grade

B for Buy & Hold Grade

A for Industry Rank

B for Overall POWR Rating

The stock is also ranked #20 of 54 stocks in the Technology – Hardware industry.

Applied Materials, Inc. (AMAT)

AMAT is involved in providing materials engineering solutions for application in the semiconductor, solar photovoltaic, and flat panel display sectors. AMAT’s stock has returned 65.1% over the past year.

The company  recently forged a collaboration with BE Semiconductor Industries to make the world’s first equipment solution for die-based hybrid bonding. It also  announced a quarterly cash dividend of $0.22 per share.

For the quarter ended October 2020, AMAT  saw a 25% increase in net sales  versus the same period last year. The company’s operating margin increased 4.4 percentage points over the same period.

AMAT’s revenue is estimated to increase 23.3% for the quarter ended April 31, 2021 and 14.9% in 2021. Its  EPS is expected to rise 22.1% in 2021 and 16.1% per year over the next five years.

AMAT’s strong fundamentals are reflected in its POWR Ratings. It has a Buy rating with an A for Trade Grade and Industry Rank. It is ranked #28 of 102 stocks in the Semiconductor & Wireless Chip industry.

Cirrus Logic, Inc. (CRUS)

CRUS develops and delivers analog and mixed-signal integrated circuits. The company’s products find application in the audio and energy industries. CRUS’ stock price has increased 24.1% over the past year.

CRUS recently launched new advanced haptic and sensing technology solutions. The new solutions find application in the gaming, smartphones, wearables, and automotive industries.

For the quarter ended September 2020, the company saw a decline in total operating expenses of 4.2% compared to the same period last year.

CRUS’ revenue is expected to grow 6.6% for the quarter ended March 31, 2021 and 5.3% in 2021. Its  EPS growth is expected to be 8.8% in 2021 and 7.35% per annum over the next five years.

It is no surprise that CRUS has a Strong Buy in our POWR Ratings systems with a grade of A in Trade Grade, Peer Grade, and Industry Rank. In the 102-stock Semiconductor & Wireless Chip industry, CRUS is ranked #11.

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ROKU shares were trading at $399.78 per share on Thursday afternoon, down $2.48 (-0.62%). Year-to-date, ROKU has gained 20.41%, versus a 1.96% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...

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