In this article, we discuss 10 best performing tech stocks of 2022. If you want to see more of the top performers in the sector, check out 5 Best-Performing Tech Stocks of 2022.
McKinsey’s report dated August 24 identifies several technology trends for the future, segregating its assessment in two thematic groups – Silicon Age, which involves digital and IT technologies, and Engineering Tomorrow, which relates to physical technologies in areas such as energy and mobility. McKinsey considers applied AI, advanced connectivity, bioengineering, Web3, machine learning, immersive-reality technologies, cloud and edge computing, trust architectures and digital identity, space technologies, quantum technologies, and next-generation software development to be the hottest technology trends in the coming years.
Emerging markets are importing more raw materials and using advanced tech in their quest to attract more manufacturing deals and trade. This bodes well for technology firms, who need to approach the future with a growth mindset to navigate the market and gain share. The COVID-19 pandemic has made it clear that technology will continue to be an essential part of businesses. Firms need to deliver customer-focused and unique experiences to users. Otherwise they will lose in the long-term. The road to successful digital transformation requires capital expenditure and enhancing the technology ecosystem, which will lead to tech firms thriving.
Forrester’s US Tech Market Outlook for 2022 indicated higher tech spending since the beginning of the COVID-19 pandemic. Forrester’s latest budget pulse survey showed that 67% of US IT professionals expect broadening tech budgets over the next year, with 26% of respondents saying that their tech spending will increase more than 5%.
Tech stocks took a beating in 2022 amid the market sell-off and the wide shift from growth to value equities, and even the largest players like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) were not safe from the bloodbath. However, in this article, we discuss some of the best-performing tech stocks of 2022.
Photo by Austin Distel on Unsplash
Our Methodology
We selected the tech stocks that have registered notable year-to-date gains in share price as of September 15. We refrained from choosing meme stocks and penny tech stocks in this selection.
The hedge fund sentiment around the securities was assessed from Insider Monkey’s Q2 2022 database of about 900 elite hedge funds. We have ranked the list according to the number of hedge fund holders, from lowest to highest.
Best-Performing Tech Stocks For 2022
10. EVO Payments, Inc. (NASDAQ:EVOP)
Number of Hedge Fund Holders: 10
YTD Share Price Gain as of September 15: 30.08%
EVO Payments, Inc. (NASDAQ:EVOP) is a Georgia-based company that operates as an integrated payment processor in the Americas and Europe. The stock has gained about 30% year to date as of September 15, which merits its inclusion on our list of the best-performing tech stocks for 2022.
BTIG analyst Mark Palmer on August 16 downgraded EVO Payments, Inc. (NASDAQ:EVOP) to Neutral from Buy after the company agreed to be acquired by Global Payments Inc. (NYSE:GPN) for $34 per share in a $4 billion cash transaction. The stock valuation implied by the deal is fair and other bids for EVO Payments, Inc. (NASDAQ:EVOP) are unlikely to occur, the analyst said.
Among the hedge funds tracked by Insider Monkey, 10 funds were bullish on EVO Payments, Inc. (NASDAQ:EVOP) at the end of the second quarter of 2022, with collective stakes worth $86.5 million, compared to 12 funds in the prior quarter worth $84.8 million. Joe Milano’s Greenhouse Funds is the biggest position holder in the company, with approximately 3 million shares valued at $68.6 million.
While Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) remain popular choices among investors, EVO Payments, Inc. (NASDAQ:EVOP) is one of the best-performing tech stocks that should be considered for a balanced portfolio.
Here is what Artisan Small Cap Fund has to say about EVO Payments, Inc. (NASDAQ:EVOP) in its Q3 2021 investor letter:
“We trimmed our positions in EVO Payments. EVO Payments provides the distribution and technology needed for emerging market banks and software providers to process electronic payments. The company targets markets with low penetration of card payments and a regulatory push to reduce cash payments. Furthermore, it partners with leading local banks with established merchant relationships with the goal of increasing merchant acceptance through implementing EVO’s technology and distribution methodologies. When we began our investment campaign, we believed the company’s exposure to these markets would enable it to grow its reach, and as it gained scale, expand its margins towards its peers. The top-line growth opportunity has failed to materialize, and the margin expansion thesis has run its course. As a result, we have been harvesting our position.”
9. Bel Fuse Inc. (NASDAQ:BELFB)
Number of Hedge Fund Holders: 11
YTD Share Price Gain as of September 15: 106.8%
Bel Fuse Inc. (NASDAQ:BELFB) is a New Jersey-based company that designs, manufactures, and sells products for networking, telecommunication, high-speed data transmission, commercial aerospace, military, broadcasting, transportation, and consumer electronics industries in multiple countries including the United States, Macao, the United Kingdom, Slovakia, Germany, and Switzerland. As of September 15, Bel Fuse Inc. (NASDAQ:BELFB) stock has skyrocketed about 107% year to date, which makes it one of the best-performing stocks in the tech sector.
On August 2, Bel Fuse Inc. (NASDAQ:BELFB) declared a $0.06 per share quarterly dividend, in line with previous. The dividend is payable on November 1, to shareholders of the company as of the close of business on October 14.
Among the hedge funds tracked by Insider Monkey, Howard Marks’ Oaktree Capital Management is the largest stakeholder of Bel Fuse Inc. (NASDAQ:BELFB), with 462,679 shares worth $7.2 million. Overall, Bel Fuse Inc. (NASDAQ:BELFB) was part of 11 hedge fund portfolios at the end of Q2 2022, compared to 14 funds in the last quarter.
8. Absolute Software Corporation (NASDAQ:ABST)
Number of Hedge Fund Holders: 12
YTD Share Price Gain as of September 15: 17.66%
Absolute Software Corporation (NASDAQ:ABST) is a Canadian company providing software services that support the management and security of computing devices, applications, data, and networks for multiple organizations. On August 24, Absolute Software Corporation (NASDAQ:ABST) recorded a FQ4 revenue that jumped 65% to $52.5 million, beating market consensus by $0.9 million. During the period, the company reached 13.6 million active endpoints across its global customer base, an increase of 18% year-over-year. Absolute Software Corporation (NASDAQ:ABST) stock has gained about 18% YTD as of September 15.
On August 24, TD Securities analyst David Kwan raised the price target on Absolute Software Corporation (NASDAQ:ABST) to $16 from $12 and reaffirmed a Buy rating on the shares. The company posted a fiscal Q4 beat with better than anticipated 2023 guidance, the analyst told investors. Despite lower margins in the near-term due to higher growth investments, Absolute Software Corporation (NASDAQ:ABST)’s growth profile is projected to strengthen, putting it “in a solid position to deliver on its Rule of 40 target for the third consecutive year,” said the analyst.
According to Insider Monkey’s data, 12 hedge funds were bullish on Absolute Software Corporation (NASDAQ:ABST) at the end of Q2 2022, compared to 13 funds in the last quarter. Cynthia Paul’s Lynrock Lake is the leading stakeholder of the company, with roughly 6 million shares worth $51.3 million.
7. Digi International Inc. (NASDAQ:DGII)
Number of Hedge Fund Holders: 14
YTD Share Price Gain as of September 15: 40.82%
Digi International Inc. (NASDAQ:DGII) is a Minnesota-based company that offers business and mission-critical Internet of Things products, services, and solutions in the United States and internationally. On August 4, the company reported a Q2 non-GAAP EPS of $0.45, topping market consensus by $0.08. Digi International Inc. (NASDAQ:DGII)’s revenue for the second quarter came in at $104 million, up 31.5% year over year, outperforming Wall Street estimates by $7.88 million. The stock has gained about 41% on a year-over-year basis, making it one of the best tech plays for 2022.
On September 8, Cantor Fitzgerald analyst Derek Soderberg assumed coverage of Digi International Inc. (NASDAQ:DGII) with an Overweight rating and a $41 price target. The company is transforming itself from a low-margin supplier of connectivity hardware to a higher-margin distributor of a hardware and software subscription bundle. This is an advanced business model that is more compelling for customers, the analyst told investors in a research note. He believes present trends are sustainable and will offer multiple opportunities to gain recurring revenue subscriptions.
According to Insider Monkey’s second quarter data, 14 hedge funds held stakes worth $63 million in Digi International Inc. (NASDAQ:DGII), compared to 9 funds the prior quarter worth $44.30 million. Chuck Royce’s Royce & Associates is the leading position holder in the company, with 1.40 million shares valued at $34 million.
6. International Money Express, Inc. (NASDAQ:IMXI)
Number of Hedge Fund Holders: 16
YTD Share Price Gain as of September 15: 45.80%
International Money Express, Inc. (NASDAQ:IMXI) is a Florida-based company that provides money remittance services in the United States, Latin America, Mexico, Africa, Central and South America, and the Caribbean. On August 3, International Money Express, Inc. (NASDAQ:IMXI) posted a Q2 non-GAAP EPS of $0.47 and a revenue of $136.94 million, exceeding market consensus by $0.04 and $1.59 million, respectively. The revenue climbed 17.3% on a year-over -year basis. For FY 2022, International Money Express, Inc. (NASDAQ:IMXI) expects a revenue of $542 million to $551 million, an increase of 18%-20% compared to a market consensus of $541.5 million. As of September 15, the stock has gained about 46%, which makes it one of the best-performing tech stocks of 2022.
On August 4, Northland analyst Mike Grondahl raised the price target on International Money Express, Inc. (NASDAQ:IMXI) to $28 from $26 and reiterated an Outperform rating on the shares after “another strong quarter.” International Money Express, Inc. (NASDAQ:IMXI)’s momentum from 2021 has continued into 2022, the analyst added in his post-earnings research note.
Among the hedge funds tracked by Insider Monkey, 16 funds were long International Money Express, Inc. (NASDAQ:IMXI) at the end of June 2022, compared to 23 funds in the earlier quarter. Parsa Kiai’s Steamboat Capital Partners is the biggest stakeholder of the company, with 1.6 million shares worth $31.75 million.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), International Money Express, Inc. (NASDAQ:IMXI) is a notable tech stock to watch.
Here is what Voss Capital has to say about International Money Express, Inc. (NASDAQ:IMXI) in its Q2 2021 investor letter:
“We believe Intermex (International Money Express, IMXI) is a compelling long. IMXI is an international money remittance company that focuses primarily on transactions emanating from the United States and going to Mexico and Guatemala. They make their money by charging a fixed fee for each remittance transaction (85% of revenue), and to a lesser degree from foreign exchange arbitrage on transactions (14%). Their customer base is primarily low-income and under-banked immigrants from Mexico and Guatemala with family/friends remaining in their home country that need financial support. We believe IMXI is a simple story to understand, with a clean capital structure, very low capital intensity (outside of some working capital swings), a strong brand, savvy management, and excellent ongoing execution (e.g., 15-20% growth at high incremental margins). We believe there are flaws in the negative narrative surrounding the company that we can exploit, namely the skepticism around the sustainability of its growth, the stickiness of the customer base, and a misunderstanding about the economics of a digital remittance transaction versus in-person.
The consensus narrative on Wall Street is that IMXI is making a strategic error by not going “all in” on digital transactions, as MoneyGram (MGI), Western Union (WU), and well-backed private competitors like Remitly and Wise are. You will hear that the wave of the VC money shows you what the future beholds, and remittances initiated via physical brick & mortar stores are dying. As the digital transition occurs, Intermex will lose their customer base, and given the operating leverage in the model, profitability will be hit hard. Bears also argue that digital is cheaper, easier, and should create a stickier customer base in the long term. Furthermore, Intermex’s focus on only a few markets makes it hard to scale the business and they will quickly run into a wall on growth. (Click here to read full text)
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Disclosure: None. 10 Best-Performing Tech Stocks of 2022 is originally published on Insider Monkey.