The technology sector is vast, comprising gadget makers, software developers, wireless providers, streaming services, semiconductor companies, and cloud computing providers, to name just a few. Any company that sells a product or service heavily infused with technology likely belongs to the tech sector.
What are tech stocks?
Hardware Companies
These design and build devices such as:
- Personal computers.
- Networking servers.
- Semiconductors.
- Smartphones.
- Fitness trackers.
- Smart speakers.
- Enterprise equipment, such as servers and networking gear.
Software Companies
These design the software that runs on hardware, such as:
- Operating systems.
- Databases.
- Cybersecurity software.
- Productivity software.
- Cloud computing providers.
- Artificial intelligence (AI).
Software companies are increasingly moving to a software-as-a-service (SaaS) model in which customers buy a subscription to a program instead of a one-time license. The arrangement generates recurring revenue for the software company.
Semiconductor chips largely power the hardware. Semiconductor companies design and/or manufacture central processing units (CPUs), graphics processing units (GPUs), memory chips, and a wide variety of other chips that help to run today's devices.
Telecom companies that provide wireless services support the tech sector, but actually belong to the communications sector; so do the video streaming companies that provide easy access to high-quality content, and the cloud computing providers that power those streaming services.
The best tech stocks in 2025
Many of the most valuable companies in the world are technology companies. Here are three of the most dominant and largest tech stocks that investors should consider:
1. Microsoft
NASDAQ: MSFT
Key Data Points
Microsoft (MSFT +0.25%) is a dominant software company known for its Windows PC operating system and Office productivity software. Microsoft is also the second-largest provider of cloud infrastructure, and it provides AI exposure through Copilot, which is available in many different Microsoft products.
2. Apple
NASDAQ: AAPL
Key Data Points
Apple (AAPL +0.20%) makes the iPhone, iPad, and Mac computers. Intense customer loyalty ensures plenty of repeat customers, and a growing array of services makes Apple's ecosystem sticky.
3. Nvidia
NASDAQ: NVDA
Key Data Points
Nvidia (NVDA -0.71%) is the premier manufacturer of semiconductors and advanced GPUs critical for not only gaming, but also for AI applications.
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) are not technically tech stocks, despite often being lumped in with them.
These stocks actually belong to the communications (Meta and Alphabet) and consumer discretionary sectors (Amazon), despite their tech-heavy products and services.
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