In this article, we will take a detailed look at the Top 10 Tech Stocks with Strong Return on Equity.
The stock market exploding from April lows and rallying to record highs is a point of concern. That’s the sentiment echoed at UBS, with the implied intra-day index volatility close to the bottom end of a range, signaling a potential reversal.
UBS expects US economic data to deteriorate, which will put significant pressure on the market’s bull run. With the stock market Bull Run likely to pause as economic growth slows, Andrew Garthwaite, Chief Global Equity Strategist at UBS, is calling for caution.
“We continue to think August will be a down month as US growth slows but the Fed can’t cut until September,” Garthwaite said.
The S&P 500, rebounding from April lows by more than 30% and rallying to record highs, has already given rise to premium valuations. Finding gems that are significantly cheaper than the S&P 500, which is trading at 23 times forward earnings, is already proving to be a challenge, with warnings of a potential reversal.
Amid the sky-high valuation, focus is increasingly shifting to companies with an impressive track record of generating and returning value to shareholders. Nevertheless, picking stocks amid the sky-high valuations and looking for value is not easy, according to BNY’s head of market strategy, Robert Savage.
Some of the best stocks in an equity market trading at historical highs are those of companies with a return on equity that is equal to or just above the average of the underlying sector. A higher return on equity ratio affirms a company’s ability to generate returns on its shareholders’ capital regardless of the underlying economic cycle.
With that in mind, let’s take a look at the Top 10 Tech Stocks with Strong Return on Equity.
Our Methodology
To compile the list of the Top 10 Tech Stocks with Strong Return on Equity (ROE), we scanned the Finviz stock screener for technology companies with a solid track record in generating profits on shareholders capital. We narrowed our focus on stocks with a ROE of more than 40% and that were popular among elite hedge funds (as of Q1 2025). Finally, we ranked the stocks in ascending order based on the stocks return on equity.
Why are we interested in the stocks that hedge funds pile into? The reason is straightforward: our research has demonstrated that we can outperform the market by replicating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Top Tech Stocks with Strong Return on Equity
10. CDW Corporation (NASDAQ:CDW)
Return on Equity: 46.39%
Number of Hedge Fund Holders: 44
CDW Corporation (NASDAQ:CDW) is one of the top tech stocks with a strong return on equity. On August 6, the company declared a quarterly dividend of $0.63 a share. The dividend is to be paid on September 10 to shareholders of record as of August 25. The stock’s dividend yield stands at 1.53%.
The quarterly dividend comes on CDW Corporation, delivering impressive second-quarter 2025 results, whereby sales totaled $5.98 billion, representing a 10.2% year-over-year increase. Non-GAAP net income per diluted share increased 3.9% year over year to $2.60 from $2.50 a share a year ago.
“We continue to optimize cash flow generation through effective management of our working capital, enabling flexibility across our capital priorities – as shown by our commitment to returning cash to shareholders,” said Albert J. Miralles, chief financial officer, CDW.
CDW Corporation (NASDAQ:CDW) is a leading provider of information technology (IT) solutions to businesses, governments, educational institutions, and healthcare organizations. It offers a wide range of products and services, including hardware, software, and IT solutions. It helps customers navigate the complexities of the IT market and maximize their technology investments.
9. Lam Research Corporation (NASDAQ:LRCX)
Return on Equity: 58.24%
Number of Hedge Fund Holders: 91
Lam Research Corporation (NASDAQ:LRCX) is one of the top tech stocks with a strong return on equity. On July 31, analysts at Stifel reiterated a ‘Buy’ rating on the semiconductor equipment maker and raised the price target to $115 from $110.
The stock price target hikes follow Lam Research delivering impressive quarterly results that exceed consensus estimates on revenues and earnings. The solid results were driven by record foundry segment results, backed by strong demand from China and increased NAND upgrades.
Stifel expects the strong momentum from Lam Research’s results to continue into the second half of the year. The research firm is projecting higher quarter-over-quarter revenue supported by higher China wafer fabrication equipment spending. Likewise, the research firm expects the company’s revenue to grow by approximately 30% this year, with systems revenue increasing at a significantly higher rate.
Lam Research Corporation (NASDAQ:LRCX) is a technology company that designs, manufactures, and services semiconductor processing equipment used in the fabrication of integrated circuits. It focuses on wafer fabrication, providing tools and services for chipmakers to produce smaller, faster, and more efficient electronic devices.
8. Automatic Data Processing, Inc. (NASDAQ:ADP)
Return on Equity: 76%
Number of Hedge Fund Holders: 65
Automatic Data Processing, Inc. (NASDAQ:ADP) is one of the top tech stocks with a strong return on equity. On August 6, the company reiterated its commitment to shareholder value by declaring a quarterly dividend of $1.54 a share.
The dividend is payable on October 1, 2025, to shareholders of record as of September 12, 2025. The quarterly dividend, which translates to a dividend yield of 2.01%, follows the company’s delivery of solid fourth-quarter fiscal 2025 results, with earnings and revenues exceeding expectations.
Revenue in the quarter was up 7.5% year-over-year to $5.13 billion, higher than $5.09 billion expected. Earnings per share came in at $2.26, higher than the expected $2.25. Record-high client satisfaction levels across the company bolstered the better-than-expected results. For fiscal 2026, ADP is projecting revenue growth of between 5% and 6% with diluted earnings per share growth of between 8% and 10%.
Automatic Data Processing, Inc. (NASDAQ:ADP) is a company that provides cloud-based human capital management (HCM) solutions and business process outsourcing (BPO) services. They help businesses manage various HR functions, including payroll, talent management, time and attendance, benefits, and other related tasks.
7. Manhattan Associates, Inc. (NASDAQ:MANH)
Return on Equity: 85.16%
Number of Hedge Fund Holders: 31
Manhattan Associates, Inc. (NASDAQ:MANH) is one of the top tech stocks with a strong return on equity. On July 22, the company delivered record second-quarter results, characterized by 22% cloud revenue growth, as the Remaining Performance Obligation (RPO) surpassed the $2 billion mark.
The robust cloud revenue growth came on the company carving out a niche as a preferred choice for modern supply chain commerce solutions. Manhattan Associates delivered non-GAAP diluted earnings per share of $1.31 compared to $1.18 in the second quarter of 2024.
Consolidated revenue rose to $272.4 million compared to $265.3 million delivered in the same quarter. Cloud subscription revenue in the quarter was $100.4 million to $82.4 million last year.
Manhattan Associates has raised its full-year guidance and now expects adjusted EPS to be between $4.76 and $4.84, above the analyst consensus of $4.60. It also expects revenue of between $1.071 billion and $1.075 billion, which is better than the $1.063 billion that analysts expect.
Manhattan Associates, Inc. (NASDAQ:MANH) is a technology company that develops, sells, deploys, services, and maintains software solutions to manage supply chains, inventory, and omni-channel operations. It offers a warehouse management solution for managing goods and information across the distribution centers.
6. NetApp, Inc. (NASDAQ:NTAP)
Return on Equity: 108.51%
Number of Hedge Fund Holders: 42
NetApp, Inc. (NASDAQ:NTAP) is one of the top tech stocks with a strong return on equity. On August 6, the company announced that Amazon FSx for NetApp ONTAP is a supported external storage option for Amazon Elastic VMware Service (Amazon EVS) on Amazon Web Services (AWS).
The integration combines NetApp’s proven, secure data management and protection capabilities with AWS’s scale, resilience, and performance. Consequently, users can run VMware Cloud Foundation (VCF) directly within their Amazon Virtual Private Cloud (Amazon VPC). The integration will also make it easier for people to migrate mission-critical workloads to the cloud, helping businesses drive transformation.
NetApp remains well-positioned to help customers accelerate modern workloads in the cloud by offering enterprise storage solutions.
“Customers utilizing Amazon EVS with FSx for ONTAP can now enjoy the same data efficiency, protection, and automation they trust on-premises,” said Pravjit Tiwana, Senior Vice President and General Manager, Cloud Storage at NetApp. “Through our collaboration with AWS, we’re making it easier to move critical workloads to the cloud and manage them at scale.”
NetApp, Inc. (NASDAQ:NTAP) is a data infrastructure company. It provides solutions for unified data storage, integrated data services, and cloud operations (CloudOps), thus helping businesses manage and optimize their data, whether it’s stored on-premises or in the cloud.
5. NVIDIA Corporation (NASDAQ:NVDA)
Return on Equity: 115.46%
Number of Hedge Fund Holders: 212
NVIDIA Corporation (NASDAQ:NVDA) is one of the top tech stocks with a strong return on equity. On August 10, it was reported that the company had agreed to pay 15% of its Chinese revenues to the US government as part of an agreement to secure export licenses.
Under the terms of the agreement, Nvidia is to pay 15% of its revenues from H20 chip sales in China to the US government. The H20 chip was specifically developed for the Chinese market in response to the US export restrictions imposed by the Biden administration in 2023. The Trump administration effectively banned its sale in April.
The reprieve to sell the H20 chip to China comes after Chief Executive Officer Jensen Huang spent months lobbying both sides for the resumption of sales to China. The US Commerce Department has reportedly started issuing H20 export licenses days after the CEO met with President Donald Trump.
NVIDIA Corporation (NASDAQ:NVDA) is a semiconductor giant that produces graphics processing units used in video games, data centers, and PCs, among other devices. The company has broadened its use into emerging markets of supercomputing and artificial intelligence. The company has demonstrated its efficiency in utilizing shareholder investments to generate profits, as evidenced by its high return on equity of 115.46%.
4. Apple Inc. (NASDAQ:AAPL)
Return on Equity: 149.81%
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the tech stocks with strong return on equity. On August 10, it was announced that the company is working on a significant upgrade to its AI voice control, which will change how people use iPhones. Reports indicate that the company is working on an upgraded version of App Intents that will make Siri the true hands-free controller for devices.
App Intents will enable people to use their voice to instruct Siri to perform complex operations, such as finding a specific photo, editing it, and sending it off. Thanks to artificial intelligence integration, the digital assistant can comment on an Instagram photo or scroll through a shopping app and add items to a cart.
With the new upgrades, Apple is exploring ways to make its voice control operate with precision inside interfaces. The upgrades would mark an important milestone and fulfillment of a promise that Siri made 15 years ago. It will also be a significant upgrade to the company’s hardware. Without App Intents, Apple’s products would be less compelling than those offered by Amazon and Google.
Apple Inc. (NASDAQ:AAPL) is a technology company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. It also sells a variety of related services, including software, digital content, and subscription-based services. The stock boasts of a high return on equity of 149.81%, affirming its ability to convert shareholder equity to profit.
3. Motorola Solutions, Inc. (NYSE:MSI)
Return on Equity: 152.71%
Number of Hedge Fund Holders: 51
Motorola Solutions, Inc. (NYSE:MSI) is one of the top tech stocks with a strong return on equity. On August 8, the company delivered strong second-quarter 2025 results, characterized by record revenues and operating earnings. Healthy growth dynamics and robust order trends drove the better-than-expected results.
The company posted earnings of $602 million, or $3.57 per share, which is better than the $552 million, or $3.24 per share, delivered in the same quarter last year. The year-over-year increase was driven by top-line growth. The earnings increase came as Motorola saw robust demand for its safety and security solutions.
Revenue in the quarter increased by 5% year-over-year to $2.8 billion, driven by robust growth in North America and internationally. The Software and Services segment grew 15%, driven by growth in Land Mobile Radio Communications. For the third quarter, Motorola expects revenue growth of approximately 7% year-over-year, with earnings per share of between $3.82 and $3.87 per share.
The company also increased its full-year guidance, now expecting revenues of $11.65 billion, representing 7.7% growth, up from the previous guidance of $11.4 billion. It also expects earnings of between $14.88 and $14.98 per share, up from the prior guidance of between $14.64 and $14.74 per share.
Motorola Solutions, Inc. (NYSE:MSI) is a technology company that provides safety and security technologies and services. It focuses on mission-critical communications, command center software, video security, and managed and support services. The company boasts a high return on equity, affirming its ability to manage assets to generate shareholder value.
2. Fortinet, Inc. (NASDAQ:FTNT)
Return on Equity: 165.17%
Number of Hedge Fund Holders: 62
Fortinet, Inc. (NASDAQ:FTNT) is one of the top tech stocks with a strong return on equity. On August 7, the company delivered solid second-quarter results, as it topped both billing and operating margin guidance.
Total billings increased by 15% to $1.78 billion in the quarter, driven by a 21% rise in Unified SASE and a 31% increase in SecOPs. The increase was driven by continued momentum among large enterprise customers, with a total deal value exceeding $1 million.
The company reported quarterly adjusted earnings of $0.64 per share, higher than the $0.57 per share delivered in the same quarter last year. Revenue in the quarter was up 13.6% year-over-year to $1.63 billion, higher than $1.62 billion that analysts expected. During the quarter, Fortinet launched three new cloud services: FortiIdentity, FortiDrive, and FortiConnect.
For the third quarter, Fortinet expects guided billing to range between $1.76 billion and $1.84 billion. It expects revenues to range between $1.67 billion and $1.73 billion with non-GAAP EPS of between $0.62 and $0.64 a share. The company also raised the midpoint of its full-year billings guidance by $100 million to between $7.325 billion and $7.475 billion.
Fortinet, Inc. (NASDAQ:FTNT) is a cybersecurity company that provides a wide range of security solutions for businesses, governments, and service providers. It offers products and services to protect networks, applications, and data from cyber threats. Its platform includes firewalls, switches, access points, and AI-powered security services.
1. GoDaddy Inc. (NYSE:GDDY)
Return on Equity as of August 11: 288.03%
Number of Hedge Fund Holders: 50
GoDaddy Inc. (NYSE:GDDY) is one of the top tech stocks with a strong return on equity. On August 7, the company delivered strong second-quarter 2025 results, affirming an accelerated pace of innovation driven by the potential of agentic artificial intelligence.
Revenue in the quarter was up 8% year-over-year to $1.2 billion, driven by a 7% increase in total bookings. Applications and commerce revenue grew 14% to $463.9 million as Core platform revenue increased 5% to $753.7 million. Net income came in at $199.9 million, representing a 37% increase.
During the quarter, GoDaddy returned value to shareholders by repurchasing 5.2 million shares for $906 million. For the third quarter, the company is projecting revenues of between $1.22 billion and $1.24 billion, representing 7% year-over-year increase. For the full year, the company has raised its revenue expectations to between $4.89 billion and $4.94 billion, representing 7% growth at the midpoint.
GoDaddy Inc. (NYSE:GDDY) is a technology company that provides a range of services to help individuals and businesses establish and grow their online presence. It offers domain registration, website hosting, and various online marketing tools. The company boasts of an impressive track record in converting financing into profits going by the high return on equity.
While we acknowledge the potential of GDDY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GDDY and that has 100x upside potential, check out our report about this cheapest AI stock.
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