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Fortinet was the top performing tech stock in the S&P 500 in 2021.
Photograph by Tony Avelar / Bloomberg
In a year when cybersecurity incidents have skyrocketed, the security hardware company
Fortinet
was the best performing technological value of the
S&P 500,
up to around 150% year-to-date.
Fortinet’s flagship product (symbol: FTNT) is the FortiGate firewall, which combines various security and networking features for businesses and governments. The company overlays the hardware with a “security fabric†that includes “zero trust†network access controls, endpoint protection, and other functionality.
The growth has been impressive: third quarter revenue increased 33%, product revenue increased 52%, and billings increased 42%. RBC analyst Dan Bergstrom wrote in a research note last month following the earnings report that the company sees widespread strength, “spurred by the convergence of security and networking, consolidation and a increased awareness of the threat landscape â€.
In a research note last week outlining the outlook for the software industry for 2022, Mizuho analyst Gregg Moskowitz noted that in recent years the company has “strengthened its competitive positioning and gained market share. network security “. But he believes he has “more work to do in the cloud,” and notes that his income comparisons are getting tougher in 2022.
The chipmaker
Nvidia
(NVDA) was the S&P 500’s second tech stock in 2021, up 137% year-to-date, taking its valuation to $ 750 billion, making it the top-valued semiconductor company in the world. world, nearly double the combined valuation of
Intelligence
(INTC) and
Advanced micro-systems
(AMD). Initially focused on the production of graphics cards used in PCs and game consoles, the company has grown into a key component supplier for cloud computing companies and a game on almost all of the key trends in the semiconductor world, including cryptocurrency mining, artificial intelligence, electric and autonomous. vehicles, and even the metaverse. Sales for the last quarter jumped 50%.
The IT and events consulting company
Gartner
(IT) grew 109% this year, as its IT research and consulting business returned to pre-pandemic levels, although its events business continued to lag. Gartner’s push reflects widespread anticipation of continued acceleration in corporate technology spending as the world emerges from the pandemic. Another solid title on a related theme was
EPAM systems
(EPAM), a computer consulting firm that has grown 95% in the past year.
Arista Networks
(ANET) have doubled this year due to strong demand for its networking products, especially from cloud players. The company is seeing accelerating earnings growth and last month announced a 4-for-1 stock split and a billion-dollar stock repurchase plan. Another stock that has benefited from strong demand from cloud players is the disk drive maker
Seagate technology
(STX), which rose 83%. While the company was once largely tied to the PC market, it now primarily sells drives for business applications.
Semiconductor equipment inventories performed very well in 2021, which is not surprising given the continued shortage of chips and new commitments to expand the capacity of
Intelligence
(INTC),
Taiwan Semiconductor
(TSM),
GlobalFoundries
(GF) and other chipmakers. Some of the best performers of the S&P 500 include
Materials applied
(AMAT), up 89%, and
UCK
(KLAC), up 70%.
intuition
(INTU) shares rose 70%, driven by better-than-expected revenue growth, in part thanks to the company’s successful acquisition of Credit Karma. Revenue for the October quarter increased 52%, 15 percentage points ahead of the company’s initial forecast. In an interview with Barron in November, Intuit CEO Sasan Goodarzi said the better-than-expected growth reflects the success of the company’s strategy in recent years to expand its services to consumers and small businesses beyond software accounting and tax.
To complete the top 10, with a gain of 69%, Google is a parent
Alphabet
(GOOGL), pushing its valuation to nearly $ 2,000 billion. The company continues to experience strong growth in demand for online advertising. Google has largely avoided the pain inflicted on some ad-supported companies by
Apple
(AAPL) is moving to new rules that make it harder to track customer behavior on iPhones. Search activity is not as reliant as display ads for determining consumer intent, and it seems likely that some ad spend will shift from social media to search-based advertising. Growth is also robust in the company’s YouTube business.
Write to Eric J. Savitz at [email protected]
