Technology hardware companies are well-poised to gain from increasing demand for innovative devices amid rapid technological advancement especially artificial intelligence (AI) proliferation and 5G rollout.
Enterprise spending remains a key growth driver of the tech hardware segment. Businesses are allocating significant budgets to upgrade their IT infrastructure amid accelerated digital transformation and cloud migration and AI. Investment in high-performance servers, cloud-enabled devices, and secure networking solutions is on the rise, creating robust opportunities for tech hardware providers.
According to a report from Garter, worldwide IT spending is expected to be $5.74 trillion in 2025, up 9.3% year over year, as tech companies focus on building the supply-side infrastructure for GenAI (generative AI).
Tech hardware will also be constituting a chunk of consumer spending as consumers look for cutting-edge smartphones, laptops, gaming consoles and other electronic devices, driving momentum going forward. Moreover, increasing eco-conscious buyers are now looking for cutting-tech devices that not only offer high performance but also sustainability and eco-friendly features.
Investors looking for stocks to boost portfolio returns in 2025 could benefit from adding tech hardware stocks that have robust growth potential. Here are four tech hardware companies — NVIDIA Corporation NVDA, Seagate Technology Holdings plc STX, QUALCOMM Incorporated QCOM and Arista Networks Inc ANET — that could present solid investment opportunities.
Key Tech Hardware Stocks to Watch
NVIDIA is gaining from the strong growth of AI, high performance and accelerated computing. The data center end-market business is benefiting from the growing demand for generative AI and large language models using graphic processing units based on NVIDIA Hopper and Ampere architectures. A surge in hyperscale demand and higher sell-ins to partner across the Gaming and ProViz end markets following the normalization of channel inventory are acting as tailwinds.
The stock carries a Zacks Rank #2 (Buy) and has a VGM Score of B at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 and a Growth Score of A or B offer solid investment opportunities.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2026 earnings has improved 10.3% to $4.16 per share over the past 60 days. The long-term estimated earnings growth rate for the stock stands at 20%. Shares of NVDA have skyrocketed 176.6% in the past year.
Seagate is well-poised to gain from continued momentum in mass capacity, owing to strengthening nearline demand from global cloud customers and improvement in the enterprise & OEM markets. Seagate expects secular trends and innovations to drive up aerial density to benefit mass capacity storage.
Management also noted that the launch of the Mozaic 3+ hard drive platform earlier in the year, which featured heat-assisted magnetic recording or HAMR technology, positioned it well to capture share in the mass capacity storage solutions market. Seagate expects HAMR to aid in exploiting megatrends like AI and machine learning, which will drive long-term demand for cost-effective mass-capacity storage solutions. The company has been ramping up its 24TB CMR / 28TB SMR drives, and these now represent the second-highest revenue product, contributing more than 20% of total near-line revenues. Margins will be driven by cost discipline and a favorable product mix shift to mass-capacity products.
STX carries a Zacks Rank #2 and has a VGM Score of A at present. The Zacks Consensus Estimate for STX’s fiscal 2025 earnings has improved 2.9% to $7.82 per share over the past 60 days.
Qualcomm is a fabless semiconductor company. With the accelerated rollout of 5G technology, it is benefiting from investments toward building a licensing program in mobile. Qualcomm is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor firm for the intelligent edge. This is likely to expand its total addressable market to approximately $900 billion by 2030. This augurs well for the company's long-term growth proposition. For the first quarter of fiscal 2025, Qualcomm expects GAAP revenues of $10.5-$11.3 billion due to market stabilization, recovery in market demand and portfolio strength.
QCOM carries a Zacks Rank #2 and has a VGM Score of B at present. The Zacks Consensus Estimate for QCOM’s fiscal 2025 earnings has improved 1.5% to $11.14 per share over the past 60 days. The long-term estimated earnings growth rate for the stock stands at 6.6%.
Arista Networks is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products. The company remains well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations. It also continues to innovate in areas such as deep packet buffers, embedded optics, and reversible cooling.
ANET carries a Zacks Rank #2 and has a Growth Score of A at present. The Zacks Consensus Estimate for ANET’s 2024 earnings has improved 6.3% to $2.20 per share over the past 60 days. The long-term estimated earnings growth rate for the stock stands at 17.1%. ANET stock has surged 92% in the past year.
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Seagate Technology Holdings PLC (STX) : Free Stock Analysis Report
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