The Best Tech Stocks to Buy in 2020

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Tech stocks powered most of the growth in the U.S. economy over the past two decades, and today’s next-generation innovators are still moving markets. Technology transformed the world’s economy over the past 100 years, but it’s just getting started. A new wave of up and coming tech stocks is making its mark on the world. Some experts say we’re on the threshold of a fourth industrial revolution and technology powered by artificial intelligence will lead the charge.

The companies that powered the tech revolution practically run the world today, but the next wave of leading tech stocks has the potential to surpass even the largest tech titans. Sure, bluechip tech stocks will always be a favorite on Wall Street, but how fast can a company like Apple (AAPL– with a market cap of over $1 trillion – really grow its revenues? Instead, savvy investors should be looking for the under-the-radar, small to mid-cap players. While these up and coming tech stocks might not be as sure of a bet as Apple or Microsoft (MSFT), the potential upside is often greater.

Up And Coming Tech Stocks To Watch

These companies aren’t the largest, but they could be primed to take over the market. No one can mess with Alphabet (GOOGL) Facebook (FB) and the other Big Tech Titans, but these companies could offer better long-term revenue growth at this stage in the game.

slack nyse ipo
Slack Technologies debuted in early 2019 via a direct listing. Above: The NYSE decked out for Slack’s IPO. Photo credit: Bloomberg.ca.

Slack Technologies, Inc. (NASDAQ: WORK)

Slack is pioneering an entirely new category of software, and it’s leading the market in this developing space. Collaboration hubs are changing the way modern businesses operate, and Slack boasts the most innovative platform in the space. This company literally invented collaboration software and now it’s mastering it.

Slack is still a young company. It just completed its IPO in 2019 and it still isn’t turning a profit on paper, but investors don’t doubt this company’s market dominance and staying power. Slack could grow into a mature, profitable company, or a larger competitor could come in and buy it. Either way, early Slack shareholders will be sitting pretty if this company continues to perform and grow.

CrowdStrike (NASDAQ: CRWD)

Cybersecurity will be a huge growth driver for the technology sector over the next few years. Practically everything is hooked into the internet these days, but technology will be even more dependent on the data in the near future. The internet-of-things is already forming but, once 5G goes fully-operational, our daily lives will be practically dependent on net-connected technology. This wave of vita IoT-connected devices needs to be protected, that’s the basic, bullish growth narrative for cybersecurity bulls.

tech stocks crowdstrike
CrowdStrike is one of the world’s leading cybersecurity firms. Its stock nearly doubled on its IPO day. Above: CrowdStrike CEO George Kurtz.

CrowdStrike is one of the world’s leading cybersecurity firms. When shares hit the public market in early 2019, hungry investors snatched them up in a hurry. This company specializes in end-point device protection, and its software is almost entirely based in the cloud. CloudStrike makes it easy for businesses of all sizes to protect their network. This cybersecurity firm is definitely an up and coming tech stock, and it could easily be the market leader within just a few years.

Zoom Inc. (NYSE: ZOOM)

One of the best performing IPOs of 2019, Zoom technologies offers an easy-to-use videoconferencing platform that’s suitable for businesses of all sizes. Zoom video conferencing is extremely easy to set up and requires no additional hardware. Lyft, Uber, and several other big-name tech stocks completed IPOs in 2019, but Zoom was one of the only profitable companies among them.

Zoom allows users to meet from any device, so it’s very flexible and more usable than traditional video conferencing systems. Sign up is free, and Zoom offers solutions to accommodate businesses of all sizes. Markets love this kind of up and coming tech stock because it has mass appeal. Any sized business can use Zoom. It’s perfect for small businesses that can’t afford an IT department or a professional-grade setup. However, it’s rich with features and easily integrates into large networks so it’s popular with large-scale enterprises.

Where Will The Next Up and Coming Tech Stocks Come From?

cloud stocks forecast
Experts believe the cloud services sector will continue to grow in 2020. Above: Worldwide public cloud services revenues.

SaaS and cloud-based software are two of the hottest up and coming tech industries. In fact, SaaS technology powers most of the technology on this list. Customers love cloud-based solutions because they allow them to use high-level solutions without paying for pricey hardware, and Cloud providers love it because it allows them to offer their customers low-margin subscription services. Cloud is flexible and affordable, and developers are just scratching the surface of what’s possible.

Blockchain and AI Stocks

Blockchain stocks continue to have promise, but the hype is mostly drained out of that sector. Institutional investors don’t want to touch crypto stocks until regulators start cleaning up the industry. Until then, most blockchain stocks don’t have a chance of leading the market.

blockchain stocks sector growth
Blockchain forecasts predict the sector will grow exponentially over the coming years. Above: A chart portrays projected U.S. blockchain growth by sector. Courtesy: Grandview Research

Cybersecurity stocks could be a big growth driver for the market next year. Some of these firms are all ready to take off, but many are so early in their development that it’s difficult to pick winners. Same thing with AI stocks. While there is sure to be off-the-chart growth in the AI sector in the near future, it’s hard to pick winners outside of the traditional blue-chip tech stocks.

Closing Thoughts

Picking the best up and coming tech stocks isn’t easy. However, investors that do their research and keep an ear to the ground have a better chance than others. Don’t follow the market, do your own due diligence. Even a small investment in the right company can pay off huge in a few years.

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Chris Dios is an American writer and entrepreneur based in the Greater NYC area.

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