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7 Technology Stocks That Will Resist Any Market Selloff

7 Technology Stocks That Will Resist Any Market Selloff

Posted On November 15, 2021 2:38 pm
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For the last several years, tech stocks have been one of the favorite targets of the market alarmists. In 2021, we’ve already had a couple of hard selloffs in technology stocks.

In the most bullish of bull markets, investors still get those articles forecasting that the end is nigh. It seems permabears can always find some reason to believe the market is going to crash. And truthfully they only have to be right once for your portfolio to be in a world of hurt.

But this is not one of those articles. The market is volatile, but market timing is a fool’s errand.

However, you have to be a next-level optimist if you don’t have any concerns about what’s happening with the economy. And once you acknowledge those concerns, it doesn’t take much to consider how that could affect the broader market and more narrowly the stocks in your portfolio.

This concern brings us to this article’s focus on tech stocks. This is a resilient sector that continues to reward growth-oriented investors. But that doesn’t mean all tech stocks are the same. (Have a look at Eric Fry’s latest Smart Money newsletter for his take on tech stocks driving critical trends into 2022.)

And, of course, there are some stocks that are more prone to those gut-wrenching drops than others. The ones that don’t are the ones that you should watch.

That’s the focus of this article. Using the stock’s 2021 performance along with analyst sentiment, here are seven tech stocks that are likely to resist any market selloff.

  • Microsoft (NASDAQ:MSFT)
  • ON Semicoductor (NASDAQ:ON)
  • Broadcom (NASDAQ:AVGO)
  • Applied Materials (NASDAQ:AMAT)
  • PayPal (NASDAQ:PYPL)
  • Cirrus Logic (NASDAQ:CRUS)
  • RingCentral (NYSE:RNG)

Tech Stocks To Resist Any Market Selloff: Microsoft (MSFT)

I was trying to stay away from “big tech” companies, but it’s difficult to not include Microsoft on this list of tech stocks. Recently, Microsoft overtook Apple (NASDAQ:AAPL) to become the world’s most valuable company.

The company was a pandemic winner with its Teams collaboration software. But the company has continued to thrive even as the economy reopens. That’s largely due to the growth in its cloud computing business.

And as Dana Blankenhorn wrote for InvestorPlace, Microsoft is also angling to become a leader in the developing metaverse via a partnership with Nvidia (NASDAQ:NVDA). In short, the company has many catalysts and its most recent earnings report showed that it is firing on all cylinders.

Microsoft delivered a strong earnings report in October. Subsequently, analysts continue to raise their price target for the stock which is already up 48.7% in 2021. And if investors needed one more reason to believe MSFT stock will weather any selloff, they can look at the company’s quarterly dividend which has increased for the last 12 years and now pays out $2.24 per year.

ON Semiconductor (ON)

Few things predict stock price growth as positive earnings. ON Semiconductor just delivered its sixth-consecutive quarter in which it beat analysts’ earnings expectations.

Since that Oct. 31 report , over a dozen analysts have increased their price target for ON stock. The combination of positive earnings and analyst upgrades is always a bullish indicator.

An earnings report tells you the “what.” Equally important is the “why.” In the case of ON Semiconductor it is a significant supplier for electric vehicles (EVs).  Specifically the Arizona-based company’s custom foundry business provides image sensors and power semiconductors. Both of these chips will remain in high demand as manufacturers begin to roll-out these vehicles.

The company also has significant exposure to the ongoing 5G rollout and the Internet of Things (IoT) sector.

The stock did go through a sharp selloff in April, but otherwise ON stock has been a stellar performer that is up 76% in 2021.

Broadcom (AVGO)

Another semiconductor company that makes my list of tech stocks that are likely to survive a market selloff is Broadcom. AVGO stock is up over 25% in 2021 (26.5% as of this writing).

The company provides chips for data centers as well as for the networking, software, and industrial markets.

Broadcom has beaten on the top and bottom lines for the last five consecutive quarters. And it has strong, growing free cash flow (FCF) that topped $3.43 billion in the last quarter, an 11% quarterly increase. Plus, investors can enjoy an attractive dividend which has grown for 10 consecutive years with a three-year growth rate of 177.75%.

The company is trading at the upper end of is 52-week range and is bumping up against the consensus price of analysts. However…

 

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