It can be hard to find tech stocks that let you sleep at night. Given the ever-increasing pace at which technology changes nowadays,many investors rightly feel the need to continuously keep tabs on the news feeds, press releases, and message boards to ensure all is well with the often-volatile tech stocks they own.
But it's also possible to find market-beating tech stocks youdon'thave to constantly babysit. We asked three of our contributors for their input, and here's why they think Corning , Cisco Systems , and Google parent Alphabet fit the bill:
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Steve Symington(Corning): Arguably no company has more effectively proved it has what it takes to not just survive but tothrive no matter what the world throws its way than Corning. Founded in 1851, the glass products specialist has successfully weathered multiple technological revolutions.
Source: Corning Incorporated.
Today, Corning gathers the largest portion of its revenue from its steady Display Technologies segment (think LCD cover glass, for example). But that's also complemented by promising innovation for data centers and fiber-to-the-home in Optical Communications, diesel emissions products under Environmental Technologies, laboratory glassware and equipment under Life Sciences, and exciting growth opportunities including Gorilla Glass under its Specialty Materials segment.
But more pertinent to this conversation, I greatly admire Corning CEO Wendell Weeks for his consistent refusal to manage the business around Wall Street's quarterly expectations -- though if you insist on keeping track, Corning has still managed to exceed analysts' estimates for each of the past four quarters. Combined with itsrelentless focus on operational efficiency, andgenerous capital returns programs -- which as of last quarter grew to include a new $2 billion share-repurchase authorization -- that's partly why I singled out Corning almost three years ago as a stock investors could safelybuy and hold for the next 50 yearsif they so chose. Shares have climbed almost 50% since then, comfortably outpacing the broader market's returns. Thanks to Corning's innovative spirit and long-term focus, I suspect patient Corning investors will continue enjoying market-beating returns for decades to come.
Andres Cardenal(Alphabet). Alphabet is one of the biggest positions in my personal portfolio, and also one that Im planning to hold for years, or even decades, to come. Companies in the tech business are always operating in a dynamic and changing environment, so it's important to monitor the main industry trends to make sure you're investing in the right names. However, while no company is completely immune to a changing industry landscape, Alphabet has established a rock-solid competitive position in its key markets, and the company is one of the strongest and most ubiquitous players in the tech industry.
According to data from StatCounter, Google owns a gargantuan market share of over 91% of the global search market, including both desktop and mobile. The brand is so popular that "google" has even become a verb. In addition, Alphabet owns many of the most popular services and applications around, including its Android mobile operating system, YouTube, Gmail, Chrome, and Maps, among countless others.
Alphabet has a pristine balance sheet, with more cash and liquid investments than debt, and the company is run by one of the most visionary and innovative management teams around. The future is hard to predict, and almost anything can happen in the tech industry, but Alphabet has the strategic resources, the money, and human skill to adapt and continue thriving under all kinds of scenarios.
Tim Green (Cisco): No matter how dominant a tech company may appear, the possibility that an unexpected development could derail its business should always be in the back of investors' minds. There aren't too many tech companies that can be bought and forgotten about without taking this risk, but networking giant Cisco Systems is one of them.
Source: Cisco Systems.
Cisco is the dominant player in the networking hardware market, with its share of the switching and routing markets dwarfing those of its closest competitors. The landscape is changing, with cloud computing and the explosion of devices connecting to the Internet altering the networking requirements of Cisco's enterprise clients. Software-defined-networking, or SDN, has been a buzzword for the past few years, one that had the potential to disrupt Cisco's lucrative business model.
It may seem as if investors should be watching Cisco like a hawk, but the company is in prime position to benefit from these changes. Networking is becoming more complex, and Cisco is moving toward being a seller of solutions, not just hardware. Cisco faces plenty of competition, but this has always been the case, and the company has maintained its market share through the years despite the existence of lower-priced alternatives. As long as Cisco continues to listen and respond to the needs of its clients, the company's dominant position should be relatively safe.
The article 3 Tech Stocks You Don't Have to Babysit originally appeared on Fool.com.
Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool recommends Cisco Systems and Corning. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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