Technology stocks have been far from a sure bet since 2021 began its stretch run in mid-November. Inflationary concerns and fears of rising interest rates pushed investors out of software and internet companies, sending scores of prior outperformers into correction territory.
Despite the sell-off and the volatility across wide swaths of the tech industry, investors have made a bundle of money betting on specific companies and stories. Certain areas of the semiconductor market ballooned this year, as demand soared for processors that could speed crypto mining, aid game development and connect more devices to the internet.
Fintech, cloud software and cybersecurity had their share of standouts as well, even if buying baskets of those stocks and holding them for the year would not have been a particularly lucrative investment.
Here are the five biggest gainers in 2021 among U.S. tech companies valued at $5 billion or more. The list excludes companies that went public this year. Prices are as of Thursday's close.
Upstart
When Upstart held its stock market debut in mid-December of last year, the company was valued at about $1.5 billion. Just over a year later, it's a $12 billion company.
Upstart shares are up 264% since the beginning of 2021, including a gain of 171% over a wild three-day stretch in March.
The company uses machine learning to underwrite consumer loans and provides its technology to banking partners who can then better target customers.
Revenue in the third quarter soared 250% to $228 million. In addition to rapid growth, Upstart is giving investors something that's unusual from a newly public tech company: profits. Upstart has generated earnings for five straight quarters, including net income of $29.1 million in the latest period, up from $9.7 million a year earlier.
Upstart said in its earnings call in November that it now provides technology services to 31 banks and credit unions, up from 10 a year ago. In the third quarter, the company powered 362,780 loans, up 244% from a year earlier.
CEO David Girouard said on the call that the company is now moving beyond personal and auto loans and into small-dollar loans for consumers with "immediate cash needs."
"Our bank partners rightly feel pressured to better serve low-to-moderate income Americans, and we want to help them do that right," Girouard said. "The interest in the small dollar product from our bank and credit union partners is off the charts and we hope to bring it to market before the end of 2022."
Synaptics
Synaptics was founded in 1986 and went public 16 years later. But it took until 2020 for investors to start getting excited about the stock. This year it took off, soaring 189%.
Synaptics grew up in the heart of Silicon Valley, developing touchpads and scroll pads for PCs as well as biometrics. Its touch technology then gained resonance with smartphones. Now, with more devices acting like computers, Synaptics has positioned itself at the center of the "Internet of Things" (IoT) boom.
The company's technology can be found in connected cars, virtual reality headsets, set-top boxes, drones and gaming systems. It focuses on low-power consumption for all sorts of wireless devices.
"We've done really really well with that business — it's outperformed our best expectations," CEO Michael Hurlston told CNBC's Jim Cramer in July. "I think it's because we didn't go after what everybody else was chasing. We repositioned it to go after an interesting market that has turned out to be a great grower."
Earlier this month, Synaptics completed its $549 million acquisition of DSP Group, which provides voice processing and wireless chipsets.
Asana
At its peak in mid-November, Asana was up almost five-fold for the year, far outpacing all other U.S. tech stocks. It's lost almost half its value since then, falling alongside a bunch of other high-priced cloud software stocks.
Still, the provider of software that helps marketing, operations and sales teams manage projects and collaborate remotely is up 164% in 2021, driven by year-over-year revenue growth of at least 70% in the second and third quarters.
Like Upstart, Asana went public in 2020 but its coming-out party with investors took a few months to get rolling. Dustin Moskovitz, the company's billionaire co-founder and CEO, has been buying along the way.
Moskovitz has purchased about $293 million worth of Asana shares in December, taking advantage of the dip to bolster his position. He now controls about 44% of the company's Class A and Class B combined shares, up from 36% before the company's New York Stock Exchange debut in September 2020.
Converting free users to paying customers is key to Asana's future growth and profitability. In its third-quarter earnings report earlier this month, Asana said paying clients increased by 7,000 to over 114,000 and said revenue from customers spending more than $5,000 annually jumped 96% from a year earlier.
Fortinet
With two straight quarters of revenue growth above 30%, Fortinet is expanding at its fastest rate since 2016. A flurry of ransomware attacks along with a more complex security environment created by a sudden surge in remote work led to a spike in demand for Fortinet's technology this year.
Shares are up 133%, closing on Thursday at $349.02. That's lifted the company's market cap past $57 billion, surpassing rival Palo Alto Networks, which is valued at $55 billion after its stock climbed 58% in 2021.
Following Fortinet's better-than-expected earnings report and upbeat forecast last month, analysts at Wedbush increased their price target to $400 from $350. One reason, the firm cited, was the company's free cash flow, which jumped to $329.8 million from $185.7 million a year earlier.
"In a nutshell, Billings growth upside, strong FCF, and a healthy pipeline should be the trifecta to drive this stock higher," wrote the Wedbush analysts, who kept their buy recommendation on the stock.
Nvidia
Chipmaker Nvidia was the best-performing mega-cap tech stock of the year. The shares soared 127% in 2021, pushing the company's market cap to $741 billion, seventh highest among U.S. tech companies, behind the five Big Tech names and Tesla.
Revenue growth has topped 50% in each of the last five quarters, proving that Nvidia's high-performance graphics processing units remain in hot demand. Within the data center, Nvidia's technology bolsters artificial intelligence and data-intensive workloads, while gaming systems continue to require heftier processing power.
Earlier this year, Nvidia released new processors specifically for crypto mining. They've generated $526 million in revenue so far, but crypto is proving to be a volatile market for Nvidia. The company said last month that sales of the products plunged 60% sequentially from the second quarter to the third and are expected to be "very negligible" in the fourth quarter.
Investors aren't expressing much concern. The stock climbed more than 8% after the earnings report, largely because gaming processors, Nvidia's core business, generated $2.76 billion in revenue, an increase of 106% from last year.
"We continue to believe the company's long-term prospects are some of the best in the semiconductor industry," analysts from Piper Sandler wrote in a note after third-quarter earnings. They maintained their buy rating and raised their price target to $350 from $260.
WATCH: Nvidia could be a $10 trillion stock one day, says Jim Cramer
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Here are the top-performing technology stocks of 2021 - CNBC
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