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It's been a good year for information technology and data center solutions – just look at the performance of our 2015 top stock picks.
Even the leader in IT, International Business Machines Corp. (NYSE: IBM), is up 7% this year despite two straight years of declines in 2013 and 2014.
But the real story this year is not the giants like IBM, but rather the smaller tech stocks that have been on a tear.
Cognizant Technologies Solutions Corp. (Nasdaq: CTSH) stock, for example, is up 23.1%. CTSH is not an IBM or a Hewlett-Packard Co. (NYSE: HPQ) – or even an Accenture Plc. (NYSE: ACN) – in the nearly-trillion dollar IT services market. In fact, it ranks 19th in 2014 sales, according to Bloomberg Intelligence.
But what this IT services underdog has seen is outstanding revenue growth at a time when the giants are slowing or even declining. For the first quarter of this year, for example, CTSH sales grew 20.2% year over year. They grew 16.4% for the fourth quarter of 2014.
Compare that to IBM, who saw sales drop 11.9% in both of those quarters.
Money Morning Defense & Tech Specialist Michael A. Robinson has twice recommended exchange-traded funds that feature CTSH stock, making CTSH stock a good investment to stash away as a part of a bigger tech investing portfolio.
On Oct. 29, 2014, Robinson recommended the Guggenheim S&P 500 Equal Weight Technology ETF (NYSE Arca: RYT), which has climbed 12.7% since then. On Dec. 31, 2014, he recommended another tech ETF featuring CTSH stock, the Technology Select Sector SPDR Fund (NYSE Arca: XLK) – which is up 5.7%.
Another IT stock on the rise in 2015 is Avago Technologies Ltd. (Nasdaq: AVGO). Avago is a Singapore-based chipmaker that supplies chips to help speed up processing in cloud data centers. It's up 41.5% this year.
It was already on a roll this year, and it got an even bigger jolt this week when it was reported that AVGO would purchase fellow chipmaker Broadcom Corp. (Nasdaq: BRCM) in the biggest semiconductor deal ever. AVGO stock is up 7.8% this week.
While IT makes gains on our list of top stock pick performers, a handful of biotechs are still up as much as 78% this year. To see the leading 10 of our 2015 top stock picks, check out the table below: