Everything you need to know about US technology stocks

Why such an interest in US technology stocks?

US technology stocks, they bring together a variety of stocks from companies that are dedicated to technological innovation. They operate in a number of key areas that are often topical, such as software, computer hardware and, especially now, artificial intelligence (AI). So it makes sense if you're interested in this sector, which, according to FTSE Russell data, represents about 27% of the total market capitalization of the US market! Yes, you read it well.

With 27% therefore, it is easy to understand that these companies in the field of technology play a fairly important role in the current economic dynamic. They transform our daily lives for all through advances that change our way of life, whether it is our way of communicating, working, but also consuming (especially in relation to social networks).

The growing interest of investors is mainly due to the high growth potential of these companies. With the digital transformation that accelerates at a wild pace, technology companies necessarily continue to attract attention. And while we hear mainly about tools such as ChatGPT, Gemini, and all the other tools that improve our daily lives, other developments, especially in areas such as blockchain, promise to redefine markets.

All these developments are precisely what we will first explore in the next section. In other words, the sub-sectors where these stocks are concentrated.

The sub-sectors of US technology stocks

With 27% of the total market capitalization of the US market, it is obviously a vast universe. This is why it is divided into several sub-sectors, each with its own dynamics:

• Software and cloud services: This subsector includes software companies as a service (also known as SaaS), collaborative platforms (such as Slack and Microsoft Teams, to name but a few), and cloud storage solutions (or Cloud if you don't like literal translation) like AWS. In 2025, the global cloud computing market was estimated at a modest $913 billion, according to several sources.

• Material and Semiconductors: This subsector includes manufacturers of chips, computers and smartphones. You've probably heard of companies like Nvidia, leader of the GPUs, and Intel, giant microprocessors. In 2022, the semiconductor market exceeded $600 billion, and has been growing ever since.

• Internet and e-commerce: This third sub-sector includes online platforms, marketplaces such as Amazon and Alibaba, and digital advertising. In 2025, it is estimated that global e-commerce sales will range from $6400 billion to $7400 billion. The pandemic has necessarily propelled this growth.

• Emerging technologies: Probably the sub-sector that we've been talking about a lot lately, it's about expanding areas like artificial intelligence (AI), blockchain and cybersecurity. These technologies offer huge opportunities if you want to take part in the most promising trends. The only problem is that this sub-sector depends heavily on the enthusiasm of the moment and... can therefore also be very volatile, unfortunately.

Is it possible to evaluate US technology stocks?

Several specific criteria can be taken into account before investing in US technology stocks:

• Growth of turnover and net profit: Or, in other words, the ability of a company to increase its income and profits (to make money, if you prefer). For example, companies such as Apple and Microsoft regularly show double-digit growth.

• R&D/Business ratio: The R&D (R&D) ratio is another criterion that may prove important. Need an example? In 2022, Amazon invested nearly $73.2 billion in R&D, representing approximately 14.2% of its turnover! A high ratio clearly indicates that the company is investing wisely in new products. You can see this as a sign of his commitment to innovation.

• Market Shares: Google has, for example, a market share of nearly 90% in online research. Although there are other competitors (such as Bing), this significantly limits competition. Some barriers, such as high entry costs, often prevent new players from entering the market.

• Valorization (P/E, P/S): The evaluation of shares with other ratios such as Price-to-Earnings (P/E) may also be useful. A P/E of 25 may seem high, but if it is below the sector average, this may represent an opportunity to purchase. Anyway, it might sound complicated, so I'm not gonna spread out on this here.

What are the risks of US technology stocks?

A high growth potential is necessarily very attractive at first glance. But does that necessarily mean risk-free? Of course not. Who says advantages, says necessarily some related issues:

• Volatility: Technology stocks are often characterized by high volatility. This volatility can be both an opportunity and a risk. That is, rapid gains can win, but losses are just as fast, which can destroy your entire investment. So be prepared to handle this.

• Cycles of technological obsolescence: Rapid innovation is crucial in the technology sector. Take BlackBerry and Nokia, for example. Market leaders who have unfortunately seen their dominance collapse in the face of new technologies. In other words, companies need to adapt quickly, and so do you.

• Regulatory sensitivity: This sector is subject to a complex regulatory framework, and not necessarily always well defined. Issues such as data protection and digital taxation are among the main concerns. If you want a concrete example, in 2019, the Federal Trade Commission imposed a record $5 billion fine on Facebook (now Meta). Yes, $5 billion! This not only affected (as you doubt) the company, but also affected investor confidence.

• Market concentration: A majority of the sector's profits come from a few large companies, such as Google, Apple, Microsoft, Amazon, Meta and Nvidia. According to S&P Global data, these giants account for about 20% of the total market capitalization of the S&P 500 index alone, which can make it difficult for small businesses to compete, thereby limiting innovation.

Trends and prospects for US technology stocks

You don't have to tell yourself that the technological landscape is evolving at a fast pace. Some key trends appear, which present interesting opportunities for you (and me):

• Growth of AI and machine learning applications: Artificial intelligence (AI) changes our way of life very clearly, but also the way companies operate. According to a 2018 McKinsey report, the adoption of AI could add up to $13,000 billion to global GDP by 2030 (it was a little before the current excitement, so as much as saying that this study is still relevant).

• Expansion of cloud and digital services: With the rise of telework, the global cloud services market is growing at an equally impressive pace. Major players such as Amazon Web Services (AWS) and Microsoft Azure are expanding their market share.

• Cybersecurity development: Cybersecurity is and remains paramount in the face of growing cyberattacks. The market is expected to reach $345 billion by 2026, with a compound annual growth rate of 12.5%! Companies like CrowdStrike and Palo Alto Networks are at the heart of this evolution, to name but a few.

• Innovations in the hardware and semiconductor sector: The rise of flea technologies also influences electric vehicles and the Internet of Things (IoT). Companies like Intel and TSMC invest heavily in research and development.

Some resources to follow the US technology market

Here are some interesting tools to follow US technology stocks:

• Specialized Financial Platforms: Sites such as Nasdaq, Yahoo Finance Tech and Bloomberg Tech offer detailed analysis and news about this sector. For example, to keep up to date on trends, Bloomberg Tech reports statistics on the impact of emerging technologies each year.

• Analyst reports: Companies such as Morningstar and Gartner publish reports that assess the performance of each company. This information is important enough to determine whether or not an action represents a good investment.

• Key indicators to monitor: To measure the health of a technology company, you can follow some indicators. Valuation (such as the Price/Benefit ratio), income growth and innovation efforts may be essential.

Of course, it would be difficult for me not to mention Zelyos to include in your preferred tools. But deep down, it's what you want.

What should be remembered in relation to US technology stocks?

So, as you will have understood: Investing in US technology can be very successful, but only if you understand and keep informed about this dynamic sector.

Sub-sectors such as artificial intelligence, cloud computing and cybersecurity have all seen exponential growth in recent times. For example, Grand View Research estimates that the global AI market, which was estimated at $279.22 billion in 2024, will reach $1,811.75 billion by 2030! This is clearly an indicator of the enormous potential of some niches.

You can apply certain evaluation criteria to determine if an action is worth taking into account. Ratios such as Price-to-Earnings (P/E) and Price-to-Sales (P/S) are rather useful tools to evaluate the valuation of a company. I have not discussed this in detail here (because this is not the objective), so no worries if these terms are a little blurry.

You also need to be aware of the risks and issues associated with this type of investment. Although highly attractive, market volatility and rapid fluctuations can destabilize more than one.

In short, keep up-to-date with trends in technological innovation and regularly analyze market prospects. Of course, also think about diversifying your portfolio. Consider allocating funds not only to giants like Apple or Microsoft, but also to smaller companies that are emerging. And as I said before, patience is key.