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Bitcoin has had a topsy-turvy 2021, hitting an all-time high of $68,990.90 on Nov 8 from a low of $27,882.79 on Jan 4, and then again dropping to $45,588.83 on Dec 20. It is currently trading at $50,805.02, up 75.86% year to date, per coindesk.com data.
The idea of bitcoin being a solid investment vehicle gained ground among institutional investors this year. Markedly, cryptocurrencies like Bitcoin are a good hedge against the pandemic-induced weakness in traditional currencies (including the U.S. dollar) as well as inflation.
Endorsements by institutional investors like Tesla TSLA CEO Elon Musk, as well as Paul Tudor Jones and Ray Dalio, have played an important part in making bitcoin and other cryptos acceptable as an asset class that promises solid return.
However, bitcoin’s dramatic upside run, which was fueled by Tesla’s announcement of accepting the digital coin as payment for its cars, came to a screeching halt after Musk cited environmental concerns of mining bitcoins — heavy power consumption that requires usage of fossil fuel.
Regulatory crackdown in China has also rattled bitcoin investors. Apart from shutting down bitcoin mining projects in the Sichuan province, banks and fintech organizations were asked to stop dealing in cryptocurrencies.
Per a report by Arcane Research, which cited data from BTC.com, bitcoin hashrate — a measure of computing power on the network — “almost halved,” in the month following China’s crackdown on miners in May.
Soaring Tech Stocks a Better Bet
Tech stocks have been benefiting from the ongoing digitalization in the sector. The adoption of cloud computing and the integration of AI and machine learning have been key catalysts.
Rapid adoption of a hybrid work environment is expected to keep demand for PCs and laptops high. The work-from-home set-up continues to boost demand for cloud-based video conferencing, web conferencing, teleconferencing, as well as workspace communication and collaboration solutions.
Undoubtedly, cryptocurrencies like bitcoin are high-risk investments and not everybody’s forte due to their inherent volatility. Instead, tech stocks are currently better choices for building a growth-focused investment basket.
Here we pick five such tech stocks that have outperformed bitcoin this year, so far. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Clearfield CLFD shares have returned 217.7% year to date.
Clearfield provides fiberprotection, management and delivery solutions that enable rapid and cost-effective fiber-fed deployment throughout the broadband service provider space. Clearfield is benefiting from strong demand for broadband in rural areas.
Clearfield currently flaunts a Zacks Rank of 1. The Zacks Consensus Estimate for its fiscal 2022 earnings is pegged at $1.85 per share, having been raised 8.8% in the past 60 days.
SiTime SITM shares are up a massive 153.7% year to date.
SiTime offers MEMS-based silicon timing system solutions. Its offerings include oscillators, resonators and clock IC products used in automotive, Internet of things (IoT), mobile and wearables, consumer and aerospace defense.
SiTime also flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its 2021 earnings is pegged at $2.79 per share, having been revised 21.3% upward in the past 60 days.
Synaptics SYNA shares have returned 188.7% year to date.
Currently, Synaptics has a Zacks Rank #2. Synaptics is a leader in designing and marketing human interface solutions such as touchpads for notebook computers, capacitive touch screen controllers for handsets and biometric fingerprint sensors for mobile devices.
The Zacks Consensus Estimate for Synaptics’ 2021 earnings stands at $11.21 per share, having moved 12.1% north over the past 60 days.
Perficient PRFT shares have returned 173.9% year to date.
This digital consultancy provider is riding on an expanding customer base. Strong demand for Perficient’s global delivery model (40% of delivery resources are offshore) has been a key catalyst.
Perficient currently has a Zacks Rank #2. The consensus mark for its 2021 earnings has been revised 3% upward to $3.40 per share in the past 60 days.
NVIDIA NVDA shares are up 127% year to date.
NVIDIA is benefiting from the coronavirus-induced work- and learn-from-home wave. It is riding on strong growth in GeForce desktop and notebook Graphic Processing Units, boosting gaming revenues. A surge in Hyperscale demand remains a tailwind for NVIDIA’s Data Center business.
NVIDIA currently carries a Zacks Rank of #2. The Zacks Consensus Estimate for its fiscal 2022 earnings is pegged at $4.33 per share, having been revised 4.6% upward in the past 60 days.
Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Synaptics Incorporated (SYNA): Free Stock Analysis Report
Perficient, Inc. (PRFT): Free Stock Analysis Report
Clearfield, Inc. (CLFD): Free Stock Analysis Report
SiTime Corporation (SITM): Free Stock Analysis Report
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