In this article, we will take a look at 12 safe tech stocks to consider for a retirement stock portfolio.
In the past, retirees could rely on bonds to provide steady income, with 10-year Treasury yields around 6.50% in the late 1990s. However, current rates are significantly lower, resulting in a major impact over time. For instance, a $1 million investment in 10-year Treasuries now yields over $1 million less than it would have 20 years ago. Adding to this concern, today’s retirees are increasingly uncertain about the future of Social Security. According to a survey by investment manager Schroders, Americans with employer-provided retirement plans estimate they’ll need $1.2 million to retire comfortably. However, nearly half expect to have less than $500,000 saved. Another study by Transamerica Institute shows that only 1 in 5 middle-class individuals feel confident in their ability to retire or maintain a comfortable lifestyle during retirement. Many of these anxious pre-retirees plan to start Social Security benefits before age 67, even though waiting until at least age 70 would maximize their monthly payments for life. Overall, pre-retirement anxiety appears to be widespread.
That said, the retirement realm may not be as bleak as it appears at first. According to this year’s survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research, nearly 80% of retirees feel they can spend money as they wish, and an even higher percentage believe they are living the retirement lifestyle they envisioned. In addition to managing their current expenses, over half of retirees are still saving for the future. Key factors contributing to this success include planning—such as deciding when to claim Social Security, preparing for emergencies, estimating retirement duration, and periodically reviewing and rebalancing asset allocations to stay on track during market fluctuations.
Additionally, inflation slowed down to its weakest pace in over three years last month, as price increases continued to ease from their generational highs. With concerns about the rising cost of living playing a central role in the presidential election campaign, the Bureau of Labor Statistics released its final inflation report before voters head to the polls. The consumer price index rose 2.4% year-over-year in September, slightly above economists’ expectations of 2.3% but down from 2.5% in August. The “core” index, excluding volatile food and energy prices, climbed 3.3% annually. On a monthly basis, prices increased by 0.2%. Meanwhile, the broader U.S. economy remains strong, with employers adding 254,000 jobs in September, countering fears of a labor market slowdown.
That said, during economic challenges, investors—especially those focused on securing their retirement—often gravitate toward low-risk stocks that offer steady returns amidst uncertainty. Healthcare and consumer stocks are typically favored in such conditions, but tech stocks can also be a smart investment if chosen wisely. Tech stocks have consistently outperformed the broader market for several years and now make up over 30% of the market’s total holdings. With that said, we’re here with a list of 12 safe tech stocks to consider for a retirement stock portfolio.
Image by Mike Flynn from Pixabay
Our Methodology
For our list of the 12 best safe stocks for a retirement portfolio, we used stock screeners, ETFs, and online rankings to identify mega-cap tech stocks with low beta values, a track record of consistent dividend payments, and well-established businesses. These stocks were then ranked based on hedge fund sentiment, as reported in Insider Monkey’s Q2 2024 database.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12. Jack Henry & Associates, Inc. (NASDAQ:JKHY)
Beta Value: 0.64
Dividend Yield: 1.22%
Number of Hedge Fund Holders: 29
Jack Henry & Associates, Inc. (NASDAQ:JKHY), a Missouri-based IT company, primarily provides payment processing services to the financial industry. As of September 6, it offers a quarterly dividend of $0.55 per share, with a dividend yield of 1.22%.
In fiscal 2024, Jack Henry & Associates, Inc. (NASDAQ:JKHY) delivered strong results, generating $2.2 billion in revenue and $489.4 million in operating income. The company also achieved a significant rise in sales bookings, including major contract wins with large financial institutions. Citi maintained a Neutral rating on the stock, while Compass Point initiated coverage with a Neutral rating and set a 12-month price target of $186. Both firms acknowledged Jack Henry’s strategic emphasis on business banking and investment in innovative products as key growth opportunities.
Additionally, the company has also reported integrating generative AI into its ‘Conversations’ product and detailing 22 competitive core wins during the final quarter.
By the end of the June quarter, 29 hedge funds tracked by Insider Monkey held stakes in Jack Henry & Associates, Inc. (NASDAQ:JKHY), up from 28 in the previous quarter, with a total value exceeding $168.2 million. Balyasny Asset Management was the largest shareholder among these hedge funds.
11. Sony Group Corporation (NYSE:SONY)
Beta Value: 0.95
Dividend Yield: 0.60%
Number of Hedge Fund Holders: 29
Sony Group Corporation (NYSE:SONY) is a global leader in technology, specializing in the design, development, and production of electronics for consumers worldwide. Its product lineup includes gaming consoles, televisions, and mobile devices. The company’s Game & Network Services division has seen growth, driven by the expanding PlayStation 5 user base and strong software sales. Additionally, the Music segment has benefited from increased streaming revenue and growth in emerging markets. Sony’s new division, Sony Pictures Experiences, is focused on strengthening its live entertainment business.
CFRA recently upgraded Sony Group Corporation (NYSE:SONY) shares from Hold to Buy, raising the price target to $102 from $88. This followed Sony’s fiscal Q1 2024 financial results, which met expectations. The company reported a 6% increase in net profit to JPY 231 billion and a 2% revenue rise to JPY 3.0 trillion. Operating profit also climbed to JPY 279 billion, a JPY 26 billion boost attributed primarily to favorable foreign exchange rates.
According to Insider Monkey’s Q2 2024 data, 29 hedge funds held positions in Sony Group Corporation (NYSE:SONY), up from 24 in the preceding quarter.
10. Amdocs Limited (NASDAQ:DOX)
Beta Value: 0.75
Dividend Yield: 2.18%
Number of Hedge Fund Holders: 32
Amdocs Limited (NASDAQ:DOX) is a diversified software company offering services such as customer relationship management, product lifecycle management, billing management, and application management.
Stifel recently initiated coverage on Amdocs Limited (NASDAQ:DOX) with a Buy rating and a price target of $100. Historically focused on revenue management solutions for telecom providers, Amdocs has expanded its product offerings to encompass a wide range of services tailored to Communications Service Providers (CSPs) for managing customer interactions. Stifel highlighted Amdocs as a “total return” story, emphasizing its strategy to deliver approximately 10% returns to investors through a combination of earnings per share growth and dividend yield.
Amdocs Limited (NASDAQ:DOX) reported strong Q3 results, posting a record revenue of $1.25 billion, representing a nearly 2% year-over-year increase. The company also achieved a record 12-month backlog of $4.25 billion and is on track to meet its fiscal year 2024 guidance, with expected revenue and non-GAAP EPS growth around 9%. Additionally, Amdocs Limited (NASDAQ:DOX) is making strides in generative AI, including a partnership with a leading global operator. The company’s cloud-related revenue, which accounted for over 20% of total revenue last year, is projected to experience double-digit growth in fiscal 2024.
As of the end of Q2 2024, 32 hedge funds tracked by Insider Monkey held stakes worth $768.7 million in Amdocs Limited (NASDAQ:DOX), compared to 33 funds holding $767 million the previous quarter.
9. Paychex Inc. (NASDAQ:PAYX)
Beta Value: 0.99
Dividend Yield: 2.82%
Number of Hedge Fund Holders: 34
Paychex Inc. (NASDAQ:PAYX) is a U.S.-based company that specializes in providing human resources, payroll, and employee benefits outsourcing services to small- and medium-sized businesses.
RBC Capital recently raised its price target for Paychex Inc. (NASDAQ:PAYX) shares from $130 to $148, while maintaining a Sector Perform rating. This revision comes on the heels of Paychex’s stronger-than-expected financial performance, which exceeded the company’s conservative revenue estimates. Additionally, Paychex Inc. (NASDAQ:PAYX) has adjusted its revenue forecast for Interest on Funds Held for Clients, projecting a decline due to falling interest rates. For fiscal year 2025, the company expects margins to increase to 42%-43%, up from the previous year, driven by disciplined expense management and strategic investments aimed at promoting profitable growth.
Among the hedge funds tracked by Insider Monkey, New York-based investment firm Select Equity Group stands out as a leading shareholder in Paychex, Inc. (NASDAQ:PAYX), holding 1.49 million shares valued at over $177.65 million.
8. Leidos Holdings, Inc. (NYSE:LDOS)
Beta Value: 0.70
Dividend Yield: 0.91%
Number of Hedge Fund Holders: 38
Leidos Holdings, Inc. (NYSE:LDOS) is a U.S.-based company specializing in defense, aviation, information technology, and biomedical research, with its headquarters in Reston, Virginia. The company provides a range of services, including scientific research, engineering, systems integration, and technical support.
Leidos Holdings, Inc. (NYSE:LDOS) recently experienced strong financial growth, reporting a 7.7% year-over-year revenue increase to $4.13 billion and a significant 33% rise in adjusted EBITDA, reaching $559 million. The company also secured several major contracts, including a $51 million deal with the Centers for Disease Control and Prevention to enhance the National Healthcare Safety Network.
Additionally, Truist Securities recently raised its price target for Leidos Holdings, Inc. (NYSE:LDOS), highlighting potential gains from the company’s existing portfolio and improved profit margins driven by cost optimization strategies.
By the end of June 2024, 38 of the 912 hedge funds tracked by Insider Monkey held positions in Leidos. The largest hedge fund shareholder was Israel Englander’s Millennium Management, with a $165.3 million stake in the company.
7. Motorola Solutions, Inc. (NYSE:MSI)
Beta Value: 0.98
Dividend Yield: 0.84%
Number of Hedge Fund Holders: 42
Motorola Solutions, Inc. (NYSE:MSI) is a U.S.-based company that provides hardware and software products for security, communications, and other related applications.
The company has shown impressive growth in its latest financial results, with products and systems integration revenue rising by 15% and operating earnings jumping by 56%. This strong performance led to an upward revision of its full-year revenue and earnings guidance. Earnings per share increased by 22%, while the company generated $180 million in operating cash flow. Additionally, Motorola Solutions, Inc. (NYSE:MSI) ended the quarter with a substantial $14 billion backlog and is expecting around 8% revenue growth for the year, with non-GAAP EPS projected between $13.22 and $13.30. The company also invested over $250 million in acquisitions and plans to dedicate approximately $850 million to R&D in 2023.
In September, Jefferies reiterated a Buy rating on the MSI stock, raising the price target from $460 to $510. The firm emphasized the company’s growth prospects in Land Mobile Radio (LMR) services, particularly the high-margin potential of new offerings like cyber protection and LMR network monitoring.
As of Q2 2024, 42 hedge funds in Insider Monkey’s database held shares of Motorola Solutions, Inc. (NYSE:MSI). The largest investor in the following quarter was William B. Gray’s Orbis Investment Management, with a $381 million stake in the company.
Wedgewood Partners stated the following regarding Motorola Solutions, Inc. (NYSE:MSI) in its Q2 2024 investor letter:
“Motorola Solutions, Inc. (NYSE:MSI) was a contributor to performance as the Company continued its steady execution with +10% sales growth and +20% operating earnings growth. Motorola also continues to grow its backlog due to its competively advantaged core land mobile radio (LMR) business is a critical long-term solution for emergency services around the globe. The technology behind LMR is relatively simple compared to current 5G wireless standards, but it is an extremely robust implementation that must withstand regular and even mega catastrophes to guarantee uptime to the emergency services that depend on it for communications. Motorola has unmatched competitive positioning in this core business and should be able to continue to expand value-added service offerings to LMR and drive attractive long-term growth.”
6. Juniper Networks, Inc. (NYSE:JNPR)
Beta Value: 0.92
Dividend Yield: 2.27%
Number of Hedge Fund Holders: 45
Juniper Networks, Inc. (NYSE:JNPR), headquartered in California, is a global networking company specializing in the development and marketing of networking products, including routers, switches, network management tools, security solutions, and software-defined networking technologies.
Citi recently resumed coverage on Juniper Networks, Inc. (NYSE:JNPR) with a Neutral rating and a price target of $40.00, following a break in coverage and a review of the company’s Q3 2024 financial results. Citi has revised its financial model, forecasting a 12% year-over-year sales decline for FY 2024, followed by a 3% increase in FY 2025. These estimates differ slightly from consensus expectations of a 10% decrease and a 4% increase, respectively. Additionally, Citi’s analysis includes the potential effects of Juniper Networks’ planned $14 billion acquisition by Hewlett Packard Enterprise, which is expected to close between late 2024 and early 2025.
Juniper Networks, Inc. (NYSE:JNPR) has also made strides in AI-Native Networking, enhancing its data center solutions to improve network visibility, analytics, and automation. These updates are aimed at reducing deployment times and operational costs. The company has also invested in Quantum Bridge Technologies to strengthen defenses against quantum computing threats.
In Q2 2024, 45 hedge funds held positions in Juniper Networks, Inc. (NYSE:JNPR), with total holdings valued at $1.114 billion. Pentwater Capital Management is the largest shareholder, with 8.875 million shares valued at $323.582 million as of June 30.
5. Automatic Data Processing, Inc. (NASDAQ:ADP)
Beta Value: 0.80
Dividend Yield: 1.95%
Number of Hedge Fund Holders: 52
Automatic Data Processing, Inc. (NASDAQ:ADP) is a global technology company specializing in cloud-based human capital management (HCM) solutions. ADP offers a range of strategic platforms and HR outsourcing services to help organizations manage their workforce efficiently.
BofA Securities recently raised its price target for Automatic Data Processing, Inc. (NASDAQ:ADP) to $281, up from the previous $276, while maintaining a Neutral rating on the stock. This follows an earlier upgrade in January 2024, where the firm cited improvements in ADP’s Professional Employer Organization (PEO) segment and predicted that growth and margins would stabilize after the second fiscal quarter. The analyst noted that payroll stocks, including ADP, tend to underperform during the early stages of rising unemployment. However, ADP’s fourth fiscal quarter results were solid, with strong bookings enabling the company to hit the upper end of its projected 4-7% growth for FY 2024. Preliminary guidance for FY 2025 also aligns with market expectations.
Additionally, Automatic Data Processing, Inc. (NASDAQ:ADP) has introduced ADP Lyric HCM, a platform designed to offer flexible, intelligent, and personalized HR solutions on a global scale. The company also announced the pricing of $1 billion in 4.450% senior notes due in 2034 for general corporate purposes.
As a consistent dividend payer, Automatic Data Processing, Inc. (NASDAQ:ADP) is considered a safe tech stock for generating passive income, having increased its dividend for 49 consecutive years. By the end of Q2 2024, 52 hedge funds tracked by Insider Monkey held stakes in ADP, with a combined value exceeding $3.06 billion.
4. Cisco Systems, Inc. (NASDAQ:CSCO)
Beta Value: 0.82
Dividend Yield: 2.95%
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading American digital communications technology company that provides a wide array of services. Earlier this year, the company launched a $1 billion fund to invest in artificial intelligence (AI) startups, with notable investments in Cohere, Mistral AI, and Scale AI. Additionally, Cisco Systems, Inc. (NASDAQ:CSCO) has a strong presence in the cybersecurity sector, offering products such as threat management, AI-powered security assistants, firewalls, and cloud security solutions.
Cisco Systems, Inc. (NASDAQ:CSCO) reported strong financial results for Q4 and the fiscal year 2024. The company achieved Q4 revenue of $13.6 billion, exceeding its guidance, and total revenue for the fiscal year reached $53.8 billion. Cisco also reported a notable 20-year high gross margin of 67.5%. For the first quarter of fiscal year 2025, Cisco Systems, Inc. (NASDAQ:CSCO) projects revenue between $13.65 billion and $13.85 billion, with full-year revenue expectations ranging from $55 billion to $56.2 billion.
Analysts are positive about CSCO and its potential. Earlier this August, HSBC upgraded Cisco Systems, Inc. (NASDAQ:CSCO) to a Buy rating and raised its target price to $58 from $46. The upgrade was based on Cisco’s “politically tactful” guidance for FY25, with a conservative outlook despite Q4 results meeting estimates. HSBC anticipates Cisco’s non-GAAP EPS will grow at a CAGR of 11.6% from 2024 to 2027, with double-digit growth expected in networking revenue for most of FY25. New Street Research also upgraded Cisco Systems, Inc. (NASDAQ:CSCO) to Buy, setting a target price of $57. The firm highlighted a significant rebound in core revenues and order flows, with a 30% sequential increase in orders—the highest quarterly growth in two decades.
As of the second quarter, 61 hedge funds held stakes in Cisco Systems, Inc. (NASDAQ:CSCO), totaling $1.6 billion. Harris Associates was the largest shareholder, owning 10.4 million shares valued at $496.4 million as of June 30.
3. Global Payments Inc. (NYSE:GPN)
Beta Value: 0.99
Dividend Yield: 1.0%
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN) is a U.S.-based financial technology company that provides payment technology and software solutions. Its extensive global commerce network includes 4.6 million merchant accounts, 4,000 tech partners, 1,500 financial institutions, and spans over 100 industries.
In the second quarter, Global Payments Inc. (NYSE:GPN) delivered strong financial results, with adjusted net revenue growing by 6% to $2.32 billion and adjusted earnings per share increasing by 12% to $2.93.
Barclays recently reaffirmed its Overweight rating on Global Payments Inc. (NYSE:GPN) with a price target of $120, despite concerns from investors about a potential slowdown in the company’s Merchant Solutions segment in 2025. Barclays countered market fears of market share loss, noting that the slowdown is not as alarming as it seems. The firm pointed out that over the past year, the company’ Point of Sale (POS) & Software grew by 10%, Integrated & Embedded by 8%, and Core Payments by 5%, resulting in overall high-single-digit growth.
By the end of Q2 2024, 66 hedge funds tracked by Insider Monkey held positions in Global Payments Inc. (NYSE:GPN), worth a total of $3.678 billion. Pzena Investment Management was the largest shareholder during this period.
2. Dell Technologies Inc. (NYSE:DELL)
Beta Value: 0.90
Dividend Yield: 1.40%
Number of Hedge Fund Holders: 88
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, and supports a wide range of information technology infrastructure, including laptops, desktops, mobile devices, workstations, storage solutions, software, and cloud services.
In Q2 of fiscal 2025, Dell Technologies Inc. (NYSE:DELL) reported $25.03 billion in revenue, a 9.12% increase year-over-year despite headwinds from exiting the VMware resale business. The combined Client Solutions Group (CSG) and Infrastructure Solutions Group (ISG) grew by 12%. The company recorded $3.2 billion in orders, driven primarily by Tier-2 cloud service providers, and shipped $3.1 billion worth of AI servers during the quarter. Additionally, management incurred a $328 million charge related to workforce reductions.
Moreover, Deutsche Bank resumed coverage of Dell Technologies Inc. (NYSE:DELL) with a Buy rating and a price target of $144, suggesting a 14% upside from current levels. The firm’s optimistic outlook is based on three key factors: expected acceleration in top-line growth across servers, storage, and commercial PCs; projected double-digit growth in the company’s bottom line supported by revenue gains and operational expenditure management; and Dell’s clear capital allocation strategy, which emphasizes returning the majority of its free cash flow (FCF) to shareholders. Analysts predict adjusted FCF to grow from $4.8 billion in FY25 to $7.4 billion by FY28, with 85% of that returned through dividends and share buybacks.
In Q2 2024, 88 hedge funds held stakes in Dell Technologies Inc. (NYSE:DELL), with total positions valued at $2.9 billion. Coatue Management emerged as the largest shareholder, holding over $1 billion in shares.
1. Microsoft Corporation (NASDAQ:MSFT)
Beta Value: 0.90
Dividend Yield: 0.80%
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT), one of the world’s largest tech companies, develops productivity software, cloud solutions, and personal computing products.
BMO Capital Markets reaffirmed its bullish outlook on Microsoft Corporation (NASDAQ:MSFT), maintaining an Outperform rating and a $500 price target. The firm made slight revisions to the company’s capital expenditure (CapEx) and depreciation analysis, leading to higher consolidated cost of goods sold (COGS) estimates for fiscal year 2026, with minimal impact on FY 2025. Despite a dip following its earnings report, Microsoft Corporation (NASDAQ:MSFT) forecasts revenue between $63.8 billion and $64.8 billion for the current quarter, slightly below the $65.07 billion estimate.
Additionally, Microsoft Corporation (NASDAQ:MSFT)’s latest financials highlight Azure as the fastest-growing cloud service among hyperscalers. Excluding contributions from per-user businesses like Enterprise Mobility and Security (EMS) and Power BI, Azure’s core growth hit 33% year-over-year in constant currency for FY 2024, up from the previously reported 30%. The company has revised its first-quarter FY 2025 guidance to reflect a 33% growth rate, compared to the earlier projection of 28-29%. Azure’s updated metrics suggest an annualized run rate of around $62 billion as of June 2024, excluding per-user businesses, down from an estimated $80 billion when they are included.
In the second quarter, 279 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT), with a total value of $89.068 billion. As of June 30, the Bill & Melinda Gates Foundation Trust emerged as the largest shareholder, holding a position valued at $15.6 billion.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $135 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. The stock contributed to performance because of continued strong operating results and investor enthusiasm regarding Microsoft’s leadership across the secular megatrends of AI and cloud computing. Recent business momentum continued to show evidence of the strength and attractiveness of Microsoft’s product portfolio among its customer set: (1) Azure OpenAI – its suite of AI services – is now used by 65% of the Fortune 100 and contributed 7% of Azure revenue (an annualized run rate of $5.2 billion); (2) GitHub Copilot – its AI code writing service – is bending the productivity curve for developers (reports of 40%- plus improvements in developer efficiency) and now has 1.8 million paid subscribers, with growth accelerating to over 35% quarter-over-quarter; and (3) Copilot Studio – its AI application service that makes it easier for anyone to build an application, automate a workflow, or create a Copilot using natural language. 30,000 organizations across every industry have used Copilot Studio to customize Copilot for Microsoft 365 or build their own, up 175% quarter-over-quarter. In the March quarter, Microsoft again reported better-than-expected financial results, highlighted by Microsoft Cloud growing 23% year-over-year, with the fastest commercial bookings in six quarters, and Azure accelerating to 31% constant currency growth, up from 28% in the previous quarter. June quarter guidance came in-line with consensus, but the company provided higher guidance for the most important segment, Intelligent Cloud, on the back of continued strong trends across Azure and Azure OpenAI. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes.”
While we acknowledge the potential of MSFT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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