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Do "Tech Stocks" Exist?

By Motley Fool Staff – Updated Nov 15, 2016 at 6:53PM

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It can be hard to find a company that isn't a tech stock.

Sure, there are "tech stocks." But the term really isn't as helpful as you might think -- because in many ways, most companies that you can think of are tech stocks. People often use the term to refer to computer-related companies and software companies. But these days, it can be hard to think of companies that don't in some way employ a fair amount of technology.

Think of pharmaceutical firms, for instance. Drug chemistry and drug-delivery processes involve technology. Golf club manufacturers such as Callaway Golf (NYSE:ELY) and Nike (NYSE:NKE) apply technology to their new product development. (New! "Maraging steel" clubs! Harder than titanium!) Pretty much any airplane-related enterprise uses technology -- from building jets to booking flights. Likewise, FedEx (NYSE:FDX) and other delivery specialists rely heavily on technology. Of course, some companies do so more than others. Sun Microsystems (NASDAQ:SUNW), for example, is much more of a technology company than is Hershey (NYSE:HSY). But even Hershey employs a fair bit of technology in its research and production.

When we hear that "tech stocks were up today," we have to wonder what exactly is being said. A good way to think about the term might be to use it for companies that draw most of their revenue from directly using or creating technology.

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Stocks Mentioned

FedEx Corporation Stock Quote
FedEx Corporation
FDX
$149.33 (-3.37%) $-5.21
NIKE, Inc. Stock Quote
NIKE, Inc.
NKE
$97.02 (-1.55%) $-1.53
The Hershey Company Stock Quote
The Hershey Company
HSY
$223.94 (-0.70%) $-1.58
Topgolf Callaway Brands Corp. Stock Quote
Topgolf Callaway Brands Corp.
MODG
$19.71 (-3.24%) $0.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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