- Tesla stock has been up and down ever since CEO Elon Musk tweeted about possibly taking Tesla private in 2018.
- Most recently, Musk settled the lawsuit that the Securities and Exchange Commission filed against him.
- Rather than investing in Tesla stock, you might want to try less volatile stocks in the technology sector.
If you own Tesla stock, you might be feeling a little queasy. In just the past week, the stock has gone from $300 a share, down to $260.56 and back up to about $316.
During this time, Elon Musk agreed to step down as Tesla’s chairman on Sept. 29, 2018, although he’s staying on as CEO. Additionally, he also settled a lawsuit with the Securities and Exchange Commission regarding his tweets in August 2018 about possibly taking Tesla private, which sent investors into a frenzy.
Tesla’s Turbulent History in 2018
The recent roller-coaster ride for Tesla shareholders started when Musk tweeted on Aug. 7, 2018, that he was considering taking Tesla private at $420 a share. The stock shot up. The SEC announced on Sept. 27, 2018, that it was suing Musk for artificially inflating the stock price, and it alleged that he didn’t have the funding to bring the company private at that price.
Shares took a nosedive after the SEC’s announcement. When it later announced that Musk had settled the suit, shares went back up.
Stocks that swing wildly can cause investors to reflect on whether they can really stomach the risk long term or whether they want to get out now. If you want to keep investing in tech but don’t want to stick around for Tesla’s next swing, you might want to consider other top tech stocks for your portfolio.
S&P 500 Revamps the Technology Sector
Stocks of young technology companies have often been volatile, but over the long haul, they have also been very profitable. So profitable, in fact, that Wall Street has moved some tech stocks out of the burgeoning technology index and into other sectors.
Facebook and Alphabet, the parent company of Google, were moved out of the S&P 500 technology index and into the communication services index, which used to be called telecom. Netflix was moved from consumer discretionary into communications services as well.
Amazon, the fourth of the so-called FANG stocks — which include Facebook, Amazon, Netflix and Google (now Alphabet) — is the only one of the four companies not in the communications services sector, as it remains in consumer discretionary.
Top Tech Stocks to Consider Adding to Your Portfolio
Despite the big-time names in the communications services sector, the technology sector continues to outperform other sectors. The tech sector is up 20 percent so far in 2018 and could be, in part, benefiting from the absence of Facebook and Alphabet because those stocks have underperformed amid worries about regulation and their handling of user data.
Here are some top tech stocks worth considering as alternatives to Tesla:
- Cisco Systems and Intel Corp.: With the changes in the tech sector, these two companies have now become part of the top five companies in the tech sector, joining Visa, Microsoft and Apple. Both companies have been able to provide steady earnings and return cash for shareholders over recent years thanks to dividends and buybacks.
- ServiceNow Inc., Synopsys Inc. and Worldpay Inc.: Cloud computing company ServiceNow Inc., software maker Synopsys Inc. and payment processor Worldpay Inc. were all named to the list of top 12 picks for U.S. stocks by RBC in a report on Oct. 1, 2018, according to Reuters.
Check Out: 9 Safest Stocks for First-Time Investors
Bank of America Merrill Lynch now recommends that investors include more technology stocks, or the technology index, in their portfolios rather than communications services and consumer discretionary positions, reported Reuters. With the tech sector’s new focus on so-called old tech, which includes more mature companies with long histories, it might have less volatility than Tesla, which is in the consumer cyclical sector.
Click through to read more about what $1,000 in stocks invested 10 years ago would be worth today.
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