BMO: Here’s where to look for smoking growth in tech

Large-cap tech shares have ripped since the market’s April 8 bottom, with the Nasdaq 100 (Invesco QQQ Trust) up roughly 27% compared to the S&P 500’s (SPDR S&P 500 ETF) roughly 20% gain.

BMO equity analyst Brian Belski has been overweight on tech for a while, but he suggests that, going forward, tech’s performance will be dominated less by a sector-wide, knee-jerk recovery from the early April tariff panics than by the performance of certain individual shares. In a note published today, he wrote:

“We advocate for a highly selective approach to sector positioning. While we still prefer slightly smaller stocks within the sector with GARP [growth at a reasonable price] attributes as our preferred strategy, we thought it would be helpful to highlight some alternative selection approaches this time around... Specifically, we decided to “decompose” [growth at a reasonable price] and identify what we would view as the growth and value opportunities within the sector at both the industry and individual stock levels.”

Belski ginned up some helpful tables that break out tech companies with the highest expectations for earnings growth — he looks at near-term and long-term earnings-per-share expectations — as well as expected near-term return on equity, a key measure of how well companies use invested dollars to produce profits, combining all those measures to come up with a ranking.

Here are the top 10, which include retail investor favorites like Palantir and Nvidia as well as some less sexy companies, such as Seagate Technology. The maker of hard disk drives has jumped nearly 100% since the market’s April 8 low.