The stock market in the United Kingdom isn’t notable for its tech stocks. There aren’t many FTSE 100 tech companies on the FTSE 100 index. Many people are unaware, however, that there are hundreds of intriguing, high-growth technology businesses in the UK market’s mid-cap and small-cap segments. In recent years, many of these businesses have provided substantial returns to investors.
Markets collapsed as a result of a convergence of high prices, higher interest rate expectations, and the outbreak of war in Europe when Russia invaded Ukraine, disproportionately impacting risky assets such as growth stocks and technology businesses. With that in mind, here are 10 tech stocks UK that you should consider adding to your portfolio for 2022 and beyond. All 10 of these businesses are profitable now and have the potential to grow significantly in the coming years.
Top 10 UK Tech Stocks to buy in March 2022
Before we get into the details of the best tech stocks to purchase in 2022, here’s a quick list of some of the best UK tech companies to invest in that can pay off highly:
- Sage Group (LON: SGE)
- Ideagen (LON: IDEA)
- Kainos Group PLC (LON: KNOS)
- Softcat (LON: SCT)
- Gamma Communications PLC (LON: GAMA)
- DotDigital Group plc (LON: DOTD)
- Calnex Solutions (LON: CLX)
- Blue Prism Group (LON: PRSM)
- Keywords Studios PLC (LON: KWS)
- Ocado Group PLC (LON: OCDO)
Top 10 UK Tech Stocks Reviewed
1. Sage Group (LON: SGE)
Sage Group is a multinational tech firm headquartered in Newcastle, United Kingdom. The company provides accounting software as a service to small to medium-sized businesses and self-employed individuals. To generate regular income, they also provide subscription-based products.
Sage is a tech stocks to watch currently since it provides a high-quality product and service while maintaining a stable base and robust balance sheet.
Its stock has dropped almost 18% in the previous six months and is currently trading well below its pre-pandemic high of 773 GBX, owing to the company’s ongoing move to a subscription-based model. However, it still represents good value for money and has the added benefit of being a dividend-paying, high-yielding company.
Meanwhile, from a fundamental standpoint, Sage Group is one of the best tech stocks for 2022. The company is valued at £6.8 billion and has a PE ratio of 25.60. It also has a 2.63 percent dividend yield, making it one of the finest income choices in the technology industry.
Sage Group is currently on a downward trend, making now an excellent time to buy. Sage Group stocks had a trading volume of £3.29 million at the time of composing this article. Its 52-week stock price high is 862 GBX, implying a 28 percent upside objective at the current price of 671.80 GBX.
2. Ideagen (LON: IDEA)
Ideagen, a software solutions company with an AIM listing, is best tech companies to invest in. Roughly 5,000 users in businesses such as aviation, finance, health, and manufacturing use the company’s governance, risk, and compliance (GRC) solutions, which it started in 1993.
They are a software as a service company, similar to Sage, albeit they formerly concentrated on selling customers ongoing licenses.
The company has had a tremendous expansion, purchasing 19 companies to date, with three more planned for 2020. These acquisitions have created certain concerns, such as rising debt, and the company’s stock has fallen from its all-time high in January.
If you’re searching for a rapidly developing UK tech stock then Ideagen is an ideal option.
Ideagen is likewise on the decline at the moment. Ideagen stocks had a trading volume of £481.25k at the time of composing this article. Its 52-week stock price high is 335 GBX, implying a 58 percent upside objective at the current price of 212 GBX.
The price-to-earnings (PE) ratio for Ideagen is a whopping 105.79 and a 0.18 percent dividend is paid by the corporation.
3. Kainos Group PLC (LON: KNOS)
If you’re searching for a UK tech stock with a lot of potentials, look no further than Kainos. Netflix, HP, Booking.com, and Diageo are just a few of the firm’s approximately 250 large customers. The UK Home Office, Department of Justice, and NHS, on the other hand, are among the public sector’s users.
Kainos has had rapid growth in recent years (a five-year revenue increase of 205 percent), and the company’s H1 FY22 results demonstrated that trend. Revenue increased by 33% to £142.3 million in the six months ended September 30. Bookings for software-as-a-service (SaaS) increased by 118 percent. Kainos is expected to generate £297 million in revenue in 2022, according to experts. That would imply a very healthy 26 percent increase.
Kainos stocks had a trading volume of £312.39k at the time of composing this article. Its 52-week stock price high is 2100 GBX, implying a 62 percent upside objective at the current price of 1292 GBX. Hence this is an ideal time to buy its stocks as it is currently cheap.
Kainos has a price-to-earnings (PE) ratio of 39.79, which is quite low, and also a 1.72 percent dividend is also paid by the firm.
4. Softcat (LON: SCT)
Softcat is an IT architecture and solutions company that offers businesses and government agencies customized, end-to-end technological solutions. Cloud services, cyber security, data analytics, and remote communication are among its specialties. Softcat is also listed in FTSE 250 tech companies.
This stock is a typical “picks-and-shovels” take on the technology boom, in our opinion. Softcat can profit as firms get up to speed digitally, much as those selling picks and shovels during the 19th-century gold rush did. It’s worth noting that a big percentage of small businesses in the UK have yet to complete full digital transformation, so Softcat should have plenty of chances in 2022 and beyond.
It has remarkable financials. Revenue has increased from £672 million to £1,157 million in the last five years. Return on capital employed (ROCE) – a fundamental metric of profitability – has averaged 65 percent over that time, which is excellent. These figures suggest to me that Softcat is a high-quality company.
Softcat stocks had a trading volume of £401.27k at the time of composing this article. Its 52-week stock price high is 2260 GBX, implying a 48 percent upside objective at the current price of 1548.58 GBX.
Softcat’s price-to-earnings (PE) ratio is 32.11 and a 1.34 percent dividend is also paid by the corporation.
5. Gamma Communications PLC (LON: GAMA)
Gamma Communications is a major unified communications (UC) technology, provider. To enhance the user experience and improve growth, UC unifies all of an organization’s communication channels, including audio, video, instant messaging, and content sharing. In today’s digital world, where employees desire to work from anywhere, it’s a major growth market. From now till 2028, the UC industry is expected to grow at a rate of more than 20% per year, as per Grand View Research.
Gamma, like Softcat and Kainos, has already experienced rapid expansion. Revenue increased from £192 million to £394 million between FY15 and FY20. ROCE averaged 27% over this time period, which is great. Analysts predict sales of £494 million in 2022 for Gamma.
Gamma stocks enjoyed a strong run in the second half of 2021, but have since retreated. This pullback has generated a purchasing opportunity. The forward-looking P/E ratio is currently around 20.58, which is fairly affordable for a firm with Gamma’s track history and potential for development.
Gamma Communications stocks had a trading volume of £137.27k at the time of composing this article. Its 52-week stock price high is 2350 GBX, implying a 59 percent upside objective at the current price of 1472 GBX so you can buy shares of this stock at a cheaper price right now. A 0.83 percent dividend is also paid by Gamma Communications.
6. DotDigital Group plc (LON: DOTD)
DotDigital is another tech stock that has had a price drop in recent months and now offers better value. It’s a technology firm that specializes in digital marketing. Its core product is a cross-channel marketing solution that enables businesses to better reach out to customers, evaluate marketing data, and expand their brands.
Over the last five years, DotDigital has increased its sales from £26.9 million to £58.1 million, a robust annualized growth rate of 16.7%. In the coming years, we believe the group will continue to expand in tandem with the e-commerce business, which is expected to rise significantly over the next five to ten years. Analysts predict revenue of £65.5 million for the fiscal year ending June 30, 2022, representing a 13% increase.
DotDigital is a cheap stock in tech right now. Its stocks had a trading volume of £1.47 million at the time of composing this article. Its 52-week stock price high is 295 GBX, implying a 260% upside objective at the current price of 81.17 GBX.
DotDigital’s price-to-earnings (PE) ratio is sitting at a very inexpensive 22.12 and the company also pays a modest dividend of 1.06%.
7. Calnex Solutions (LON: CLX)
Calnex Solutions is a Scottish technology company that specializes in communications network testing and evaluation.
This is one of our favorite companies since its services are in high demand and it could be the best tech stocks to buy right now, thanks to the rollout of 5G infrastructure. To support this new technology, mobile networks must be rapidly developed, which necessitates extensive network testing. It’s worth mentioning that between now and 2027, the market for 5G testing equipment is expected to rise at a rate of roughly 9% each year. Calnex should benefit from strong tailwinds for many years to come.
Calnex Solutions has been on the rise over the past few days, with a trading volume of £110.70k at the time of composing this article. Its 52-week stock price high is 154 GBX, implying a 10 percent upside objective at the current price of 140 GBX. Calnex appears to be on its way to a new high based on its upward trend, so you should absolutely add the company to your portfolio.
8. Blue Prism Group (LON: PRSM)
Blue Prism Group is one of the greatest tech shares to buy now. To simplify back-end business functions, this software business employs artificial intelligence and rudimentary coding. That may not be the most glamorous application of artificial intelligence, but it is one of the most essential in terms of reducing company costs.
Blue Prism Group stocks, like Calnex, have been on an upward trend for a few days, with a trading volume of £942.65k at the time of composing this article. Its 52-week stock price high is 1392 GBX, implying a 9 percent upside objective at the current price of 1273 GBX. Based on its upward trajectory, Blue Prism Group appears to be on the verge of hitting a new high; as a result, you might consider adding the company to your portfolio.
9. Keywords Studios PLC (LON: KWS)
Keyword Studios is a significant player in one of the world’s fastest-growing industries in the video gaming sector. This company works with 23 of the world’s top game developers, including Nintendo, Activision Blizzard, and Electronic Arts, to offer artwork, development, audio, and quality assurance services.
Despite the COVID-19 epidemic, the company enjoyed a strong year in 2020. Indeed, Keyword Studios reported that its work-from-home policy has reduced operating costs and improved the company’s bottom line. Investors took notice of the company’s progress, boosting shares by nearly 95% last year, giving Keyword Studios a market capitalization of £1.6 billion.
The video game industry is quickly developing, which implies that all of Keywords’ clients will be doing more business. In addition, the company recently bought g-Net Media, a tiny competitor, to expand its marketing capabilities.
Keyword Studios stocks had a trading volume of £171.43k at the time of composing this article. Its 52-week stock price high is 3366 GBX, implying a 58 percent upside objective at the current price of 2130 GBX.
The price-to-earnings (PE) ratio for Keyword Studios is a whopping 65.56 and a 0.033 percent dividend is also paid by the corporation.
10. Ocado Group PLC (LON: OCDO)
Ocado was one of the FTSE 100’s top companies in 2020. This UK tech firm creates automated warehouses for online grocery fulfillment, which didn’t seem like a big concern until global lockdowns were implemented. It also has a partnership with Marks & Spencer to transport the grocer’s food throughout the United Kingdom.
Ocado’s stock has increased by more than 90% in 2020, and the firm recently revised its earnings guidance following the UK’s. Ocado doesn’t have the market share to compete with Tesco or other big supermarket stocks, but its true worth resides in its potential to partner with current retailers.
Consider Ocado a high-risk investment for the time being. We believe this company has enormous potential, but it is not profitable, and its valuation is comparable to Tesco’s.
Ocado stocks had a trading volume of £2.08 million at the time of composing this article. Its 52-week stock price high is 2255 GBX, implying an 87 percent upside objective at the current price of 1200 GBX.
How to Buy Tech Stocks?
Below is a step-by-step guide to buying tech stocks in the UK:
Step 1: Choose a broker
You’ll need a stockbroker who trades on the London Stock Exchange in order to buy UK tech stocks.
We recommend going with a provider that enables you to buy commission-free and offers a big range of UK-based Tech stocks. If you want to trade options or derivatives, make sure you choose a broker that provides them. In addition, take a detailed look at the trading tools provided by your brokerage.
Let’s take a closer look at two of our most highly recommended trading platforms to assist you to select the ideal broker to purchase UK tech stocks:
eToro is one of the best service providers in the UK for buying stocks. More than 800 equities and 450 ETFs from around the world are available on this trading platform, featuring so many in the FTSE 100, FTSE 250, and AIM. We particularly enjoy the fact that this platform allows you to pick among low-cost CFD trading and 0% fee share trading.
The functionality of eToro’s trading tools is particularly noteworthy. Traders have accessibility to a customized web and mobile trading program with over 100 technical analyses and graphic tools built in. A market news stream, an economic calendar, and price targets from expert market analysts are also included.
eToro features a social trading network where you can exchange tactics with other traders and uncover fresh trading ideas. You can immediately see if traders are bullish or pessimistic on any of eToro’s top tech stocks by using the social network. You can also use clone portfolios to quickly invest in a professional trader’s tech stock portfolio.
The Financial Conduct Authority (FCA) of the United Kingdom regulates eToro, and all UK accounts are covered by the Financial Services Compensation Scheme. In addition, the broker provides customer service 24 hours a day, seven days a week.
- Over 800 worldwide stocks and 450 ETFs to choose from
- CFD trading
- For share CFDs, there is no commission
- Copy portfolios on a social trading network
- The FCA is in charge of regulating the industry
- Fees for inactivity and small withdrawals
Libertex is highly regarded in the United Kingdom as a major forex broker, but it also has a lot to offer in terms of stock trading. You can purchase and sell CFDs for numerous large tech stocks with Libertex. Even though the list of UK tech shares isn’t extensive, this trading platform is an excellent option if you want to trade on both the NASDAQ and the London Stock Exchange.
Libertex’s trading platform, which is available on the web and on mobile devices, is perhaps the most appealing feature. There are dozens of technical indicators and research tools in the charting package, along with a daily news feed and a market sentiment analyzer. Price notifications, which are especially useful for mobile trading, can also be configured.
Libertex has an unusual approach to trading commissions. For stock CFDs, the platform does away with spreads completely, rather than opting for a flat commission. The actual charge varies based on the stock you’re trading, but it’s usually around 0.2 percent. This framework makes calculating how much trading will cost you easier, which is especially useful for day traders.
The Cyprus Securities and Exchange Commission (CySEC) regulates Libertex, although all UK clients are protected by the Financial Services Compensation Scheme.
- CFD trading with tight spreads
- Fixed commission rate
- A powerful trading platform
- Price alerts on your phone
- CySEC is in charge of regulating it.
- The stock selection in the United Kingdom is limited.
Step 2: Open an Account
We chose eToro for this phase because it offers 0% commissions on share CFDs, a global social trading network, and hundreds of shares.
To get started, go to eToro’s website and sign up for a new account by clicking ‘Join Now.’
After you click it, a screen will open, directing you to fill out some basic information.
This is a straightforward operation that simply requires the following details from you:
- Full name
- Email address
- Mobile Number
- National Insurance Number
Step 3: Verify Your Identity
To adhere to UK anti-money laundering rules, eToro asks you to authenticate your identity before you can begin trading. Submit a copy of your driver’s license or passport, as well as a picture of a current utility bill or bank statement that verifies your address, to finish this step.
Step 4: Deposit Funds
After that, you must fund your eToro account. A minimum deposit of £140 is required by eToro, which can be made via bank transfer, debit or credit card, or e-wallet.
Step 5: Select the Tech Stock you want to Invest in
You’re all set to make your first purchase. When you find the UK tech stock you want to buy, select ‘Trade’ from the drop-down option.
Step 6: Buy Tech Stocks
If you’re trading CFDs, specify the amount you would like to invest in the order form and choose a leverage of up to 5:1. If your trading plan allows it, you can also establish a stop loss or take profit level.
When you’re ready, click ‘Open Position’ to purchase your first stock in the technology sector.
Of sure, technology businesses carry risks, yet they are equally a vital part of any portfolio. With a slew of new tech offerings expected to boost the UK stock market, as well as some inexpensive tech stocks currently on the market, now could be a great moment to gain.
The value of UK technology equities is increasing, with many analysts forecasting a strong year for London listings.
However, before you invest, make sure you have a practiced technique for entering and exiting the market, as well as a thorough understanding of the dangers associated with each transaction.
Are you ready to start investing in UK best technology stocks? Sign up for an eToro account today by clicking the link below!
Frequently Asked Questions
Why should you buy UK tech stocks now?
Technological innovation is growing at a breakneck speed. Whereas other nations, such as the US, have witnessed a major increase in tech listings in recent years, the UK has lagged behind, with companies hesitant to register in London due to rules.
Is it possible to invest in UK technology shares using an ETF?
Yes, UK tech stocks are included in several ETFs that track the FTSE 100 or FTSE 250. Global tech stock ETFs that contain UK tech companies as well as the US, European, and Asian tech companies are also available.
Do tech companies in the United Kingdom pay dividends?
Although IT businesses aren’t known for paying large dividends, several of the UK’s biggest tech stocks do payout to shareholders. Sage Group, for example, pays dividends.
Are tech stocks called growth stocks?
The majority of tech stocks are considered growth stocks, particularly in the United Kingdom, where the tech business is currently booming. Some mature tech stocks, on the other hand, maybe less volatile than their small- and mid-cap counterparts.
Should I invest in tech stocks in the United Kingdom or the United States?
The valuations of tech stocks in the United Kingdom and the United States are sometimes quite different. In the United States, technology stocks are among the most popular and costly in the world. Although tech equities in the United Kingdom are costly, they typically have lower PE ratios, and some pay dividends.