The tech sector has had a tremendous run this year. The pandemic has provided demand as well as the right conditions for the growth of certain tech companies. As more and more people spend time at home and work online, internet security has also been an area in focus. Companies like Amazon, Apple, Advanced Micro Devices, Netflix, and Adobe.
Stock performances of tech stocks to buy
Amazon has returned an incredible 63.49% in 2020. Apple is up 53.62% year-to-date while Netflix has gained 44.4% this year. AMD is up 58.7% while Adobe is up 45.29% in 2020. Compare this with the S&P500, which is up 3.86% in 2020, and the Nasdaq100, which is up 27.11% year-to-date. There is no doubt that the top tech companies have significantly outperformed the broader market and comparable benchmarks.
Within the tech sector, internet security has been gaining increasing importance. Data privacy, cybercrime, and hacking are becoming more prominent as a higher percentage of our lives are spent online. Some prominent internet security stocks include Palo Alto Networks, VeriSign, and Fortinet. VeriSign is a particularly interesting company because it is more of an internet infrastructure business. It operates two of the thirteen root nameservers of the internet. The company also has a tremendous moat in the form of a 6-year exclusive contract with the Internet Corp. for operating the domain name registry for .com and .net domains. It basically means that VeriSign gets paid an annual fee for every .com and .net domain.
There are a few hundred million such domains. So, the steam of income from such a monopolistic setup is steady and predictable. This makes VeriSign one of the best internet security stock to consider.
VeriSign recent results
VeriSign announced its second-quarter earnings in July-end. Revenue grew 2.6% year-on-year to $314 million. The renewal rate was slightly lower at 72.8% as compared to 75.4% seen in the first quarter of 2020. However, new registrations grew by 15.3 million or 4.3% y-o-y growth. Finally, net income grew to $152 million from $148 million in the same quarter the prior year.