4 Big Tech Stocks Offering Big Returns

By Damian Davila on 21 January 2015 0 comments
Photo: Jason Persse

Facebook, Twitter, Yelp, LinkedIn.

These days, it seems that tech analysts only have eyes for social media companies. But several companies are thriving in other tech fields — and their stocks are, too.

Here is a list of four cool tech stocks you should consider in 2015.

1. Alibaba

You can't talk about cool tech stocks without talking about Alibaba (NYSE: BABA). The Chinese e-commerce giant was the highlight of 2014 when it listed on the New York Stock Exchange in the biggest ever IPO at $25 billion. To put things in perspective, the previous holder of the title of largest IPO was Facebook, with a $16 billion market value.

Founded in 1999 by Jack Ma from his apartment, the Alibaba Group focuses on ecommerce (Alibaba.com), online auction hosting (Taobao.com), online money transfers (Alipay), and other types of ecommerce (e.g. think of a mashup between Amazon, eBay, Groupon, and PayPal). The company had such outstanding performance in 2014, that its founder became the richest person in Asia in December of the same year.

This Chinese online merchant can backup its high valuations with ever growing sales records. For example, during 2014's "Singles' Day" (invented in 2009 by Alibaba as China's anti–Valentine's Day), the company's sales topped $9 billion. Not only has Alibaba turned Singles' Day into the largest shopping day in the world, but the company also has the potential to spread Singles' Day to the rest of the world through its shopping portals.

Now you have a great answer to the question: "You know what's cooler than a million dollars?"

2. PayPal

I know what you're thinking, "Silly Damian, PayPal isn't a tech stock — it's owned by eBay!"

Well, PayPal isn't a tech stock… just yet. After 12 years, PayPal and eBay are planning to part ways and start trading as separate entities this 2015. This is huge news: Over a 12-month period, PayPal processes about $203 billion in payment volume and handles about 153 million active digital wallets.

Unlike newer companies, such as Square and Apple Pay, PayPal hasn't necessarily done much to innovate within the online payment industry in recent years. Still, PayPal has a lot going for it. The company currently handles $1 for every $6 spent online and holds an impressive 19% year-on-year growth rate. Also, PayPal holds two smart acquisitions: Braintree, a mobile and web payment platform for ecommerce companies, and Venmo, a payments company that doubles as a social network.

The spin off of PayPal from eBay is one tech stock transaction to watch in 2015 because it may shape the future direction of the online payment industry — and your investments.

3. Activision Blizzard

Guitar Hero, Call of Duty, World of Warcraft, Marvel: Ultimate Alliance, Spyro the Dragon. You probably recognize some of those names.

How about Activision Blizzard? Well, that's the company behind those and many more big-time video game titles. Activision Blizzard Inc. (NASDAQ:ATVI) has been around since the Atari era (remember Enduro or Pitfall!?). If you had bought $1,000 worth of Activision stock back in 1993, your investment would be over $19,100 today.

Some analysts suggest that 2015 could be a great year for Activision:

  • The company has a wide portfolio of game properties across several consoles, including Xbox One, Playstation 4, Wii U, and iPhone/iPad.
     
  • Its World of Warcraft franchise has amassed up to 12 million subscribers.
     
  • The release of Call of Duty: Advanced Warfare is the biggest entertainment launch of 2014 in terms of revenue, surpassing all movie, music, and book launches.
     
  • Its newest release, Skylanders, is poised to become a cash cow for several years.
     
  • With its Skylanders game series, Activision is securing a new generation of young gamers.
     
  • According to its 2014 Q3 statements, Activision has over $3.8 billion in cash reserves.

4. AOL

Our children and grandchildren may never understand the joys and miseries that the "pshhhkkkkkkrrrrkakingkakingkakingtshchchchchchchchcch*ding*ding*ding" modem sound brought to our lives. Just like the Tamagotchis, the Power Rangers, and the Friends cast members, AOL used to be really hot back in the 90s. Unlike other crazy 90s fads, such as Furby or Tickle Me Elmo, AOL is still alive and kicking.

What makes AOL (NYSE:AOL) cool is that it has a devoted user base that refuses to catch up with the times. In 2013 the company made $168 million in subscription fees for services such as AIM. This prompts two questions. First, who are these people? Second, do they want to buy my Beanie Babies and Pokemon collections?

Nowadays, AOL is a conglomeration of websites that earn revenue by selling ad space online. Its most well known site is The Huffington Post, which receives about 94 million views monthly. Tech analysts have mixed feelings about AOL, but they all agree that this is a company that won't go without a fight. After all, its family of sites, including TechCrunch and Joystiq, continues to connect with readers across the world.

What is your favorite tech stock?

(Disclaimer: I neither own any of these stocks nor receive compensation by the mentioned companies.)

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