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Tech Stocks Hit Hardest Since 2008 Collapse: 7 'Strong Buy' Sector Leaders for 2023 Pay Big Dividends

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For over 10 years, technology stocks led the stock market higher. It seemed like all that investors needed to do was buy one or all of the FAANG stocks, the five of the best-performing tech-centric stocks of the past decade — Facebook (now Meta Platforms), Amazon, Apple, Netflix and Google (now Alphabet) — and huge gains were inevitable. However, all these mega-cap tech giants have hit the wall from a growth standpoint and are among many in the sector laying off employees.

After the absolute worst year for the tech sector since 2008, it may be time for investors to take a long look at companies in the sector that could outperform in 2023. While only suited for aggressive growth investors, the opportunity to add some alpha-generating tech stocks at bargain prices makes sense now, especially for those with some dry powder and cash to put to work.

We screened our 24/7 Wall St. technology research database looking for companies that are Buy rated, pay the biggest dividends, and have solid upside potential for 2023. Seven top companies look like outstanding ideas, and while they all are Buy rated, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Broadcom

This stock has been crushed, and while suitable only for more aggressive investors, Wall Street continues to like the company for dividend growth. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.

Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, servers and storage, factory automation, power generation and alternative energy systems and displays.

Top analysts and many on Wall Street are very positive on the company’s massive $10 billion share repurchase authorization through December of 2023, which represents about 4.2% of the company’s market cap.

Investors receive a 3.38% dividend. BofA Securities has a $680 price target on Broadcom stock. The consensus target is $646.31, and shares ended Thursday at $557.81 apiece.

Cisco

Investors who are more conservative may want to consider this mega-cap tech leader, which recently posted outstanding quarterly results. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.
Cisco provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.

Its cybersecurity products give clients the scope, scale and capabilities to keep up with the complexity and volume of threats. Putting security above everything helps corporations innovate while keeping their assets safe.

The networking giant posted solid results recently for the fiscal first quarter of 2023, solidly beating earnings expectations, while offering up some very positive forward guidance.

Shareholders receive a 3.23% dividend. Evercore ISI’s target price is set at $56. Cisco Systems stock has a consensus target of $55.50, and Thursday’s close was at $47.50.

Corning

This company continues to be a huge player in the fiber optic world. Corning Inc. (NYSE: GLW) is a technology pioneer that manufactures LCD glass for flat-panel displays for multiple product lines.

Telecommunications (30% of sales) produces optical fiber and cable, component hardware and equipment, and photonic components for the telecommunications, CATV and networking industry. In addition, the company’s Environmental Technologies division (12% of sales) produces specialized glass, glass ceramic and polymer-based products for the automotive industry.

Corning stock comes with a 3.44% dividend. The J.P. Morgan price objective is $40, while the consensus target is $37.18. Shares closed at $31.98 on Thursday.

Dell Technologies

This high-quality company pays a solid dividend and its shares also have been hit hard. Dell Technologies Inc. (NYSE: DELL) designs, develops, manufactures, markets, sells and supports information technology (IT) hardware, software and services solutions worldwide. It operates through three segments.

Infrastructure Solutions Group provides traditional and next-generation storage solutions, and rack, blade, tower and hyperscale servers. It also offers networking products and services that help its business customers to transform and modernize their infrastructure, mobilize and enrich end-user experiences and accelerate business applications and processes. It also offers attached software and peripherals, as well as support and deployment, configuration and extended warranty services.
Dell’s The Client Solutions Group offers desktops, notebooks and workstations; displays and projectors; attached and third-party software and peripherals; as well as support and deployment, configuration and extended warranty services.

The VMware segment supports customers in the areas of hybrid and multi-cloud, modern applications, networking, security and digital workspaces, helping customers to manage IT resources across private clouds and complex multi-cloud, multi-device environments.

Dell also provides information security and cloud software and infrastructure-as-a-service solutions that enable customers to migrate, run, and manage mission-critical applications in cloud-based IT environments.

The dividend yield here is 3.41%. The $53 Credit Suisse price target is higher than the $50.24 consensus target. Dell Technologies stock closed at $39.82 on Thursday.

IBM

This blue chip giant offers investors an incredibly solid entry point, a massive dividend and a degree of safety for investors who are more conservative. International Business Machines Corp. (NYSE: IBM) provides integrated solutions and services worldwide through these four business segments.

The Software segment offers hybrid cloud platform and software solutions, such as Red Hat, an enterprise open-source solutions; software for business automation, AIOps and management, integration, and application servers; data and artificial intelligence solutions; and security software and services for threat, data and identity. This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in banking, airlines and retail industries.

The Consulting segment offers business transformation services, including strategy, business process design and operations, data and analytics, and system integration services; technology consulting services; and application and cloud platform services.

The Infrastructure segment provides on-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads; and support services and solutions for hybrid cloud infrastructure, as well as remanufacturing and remarketing services for used equipment.

The Financing segment offers lease, installment payment, loan financing and short-term working capital financing services.

Investors receive a 4.71% dividend. IBM stock has a $145 price target at BofA Securities. That compares with a $141.66 consensus target and Thursday’s closing print of $141.06.

Intel

This legacy leader in semiconductors has been hammered, and while some feel it is a value trap, it is hard to count out the company that defined the semiconductor revolution. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.
The platforms are used in various computing applications, comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Intel announced almost a year ago that it would invest significantly to build potentially the world’s largest chip-making complex in Ohio, looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to automobiles. Intel says the 1,000-acre “mega-site” northeast of Columbus has room for as many as eight plants, known as “fabs.” The company estimates it would require a $100-billion investment to fully build and equip those plants.

Shareholders receive a 5.72% dividend. Needham has set a $32 price target. The $31.13 consensus target for Intel stock also compares with the $26.21 close on Thursday.

Juniper Networks

This is another familiar name that could offer among the best in total return potential. Juniper Networks Inc. (NYSE: JNPR) designs, develops and sells network products and services worldwide. The company offers various routing products, such as ACX series universal access routers to deploy new high-bandwidth services; MX series Ethernet routers that function as a universal edge platform; PTX series packet transport routers; and NorthStar controllers.

Juniper Networks also provides switching products, including EX series Ethernet switches to address the access, aggregation and core layer switching requirements of micro branch, branch office, and campus environments; QFX series of core, spine and top-of-rack data center switches; and Juniper access points, which provide wireless access and performance.

In addition, the company offers security products including SRX series services gateways for the data center; Branch SRX family provides an integrated firewall and next-generation firewall; virtual firewall that delivers various features of physical firewalls; and advanced malware protection, a cloud-based service and Juniper ATP.

Juniper Networks stock investors receive a 2.68% dividend. The J.P. Morgan price target of $42 is well above the $33.88 consensus target. The shares closed on Thursday at $32.03.


These are seven top companies to consider for investors looking to take advantage of a dreadful year for the technology sector. Each sector leader has solid upside to posted analyst targets, is Buy rated and pays a very dependable dividend. Given that the market has not embraced much of a Santa Claus rally this year, it may make sense to buy partial positions now and see what the new year brings.

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