The technology sector is the stock sector comprising the stocks of companies that provide electronics equipment, computers, software, data, networking and telecommunications equipment, internet services, mobile phones, and semiconductors.
The technology sector offers a diverse group of products and services to businesses and customers. The sector is essential for both businesses and consumers. In order for companies to survive, operate effectively, and make strategic business decisions, they must receive information and services from software and database systems. While consumer goods such as TVs, personal computers, and stereos are continually improved and offered to all users.
The companies under the technology sector are thriving due to increasing demand for their products and services by both businesses and consumers. Every home needs certain household electronic and communication equipment, and almost every individual uses one type of software or another for day-to-day activities and business. In the same vein, businesses depend on the internet, communication devices, software, and databases to make informed decisions and run their daily business.
Moreover, there is hardly a sector of the economy that does not require the use of the internet and software services. There are also several technology hardware storage and peripherals that are in high demand by both consumers and businesses. Therefore, the technology sector is crucial to the economy.
Stocks in the technology sector have performed well over the years. Wise investors have included technology stocks in their portfolio. The sector is one of the highest capitalized sectors in the stock market. The performance of this sector has an effect on the performance or growth of other stock sectors.
Subsectors under the Technology Sector
Stocks of the following companies are part of the technology sector:
1. Software and Services:
a. Internet Software and Services
b. IT Services (IT Consulting and Other Services and Data Processing and Outsourced Services)
c. Software (Application Software, Systems Software, and Home Entertainment Software)
2. Technology Hardware and Equipment:
a. Communications Equipment
b. Technology Hardware, Storage, and Peripherals
c. Electronic Equipment, Instruments and Components (Electronic Equipment and Instruments, Electronic Components, Electronic Manufacturing Services, and Technology Distributors)
3. Semiconductors and Semiconductor Equipment (Semiconductor Equipment, and Semiconductors)