The hidden gems in tech investing

Technology companies have delivered bumper returns over the past few years due to the enthusiasm for anything linked to artificial intelligence. The so-called ‘Magnificent Seven stocks’, which include the likes of Microsoft, Apple, Amazon and Nvidia, have seen their share prices soar. But what about the other attractive tech names with the potential to outperform that are currently flying under the radar?

Here we take a look at some of the most promising companies in this flourishing sector that are held by leading investment funds.

Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and tax rules can change. Chelsea does not offer advice and so if you are unsure of anything please contact an expert adviser.

Sector overview

Before we highlight individual companies and funds, it’s worth pointing out that the global technology sector covers a wide area. This includes everything from cloud computing, software applications, computer hardware and semiconductors to tech-driven platforms, ecommerce and social media. It’s also very much a global area. The largest 100 tech firms by market capitalisation range from Nvidia, with $4.2 trillion, to Kuaishou Technology of China, worth $38.18 billion*. The countries from which they hail include the US, China, Taiwan, Germany, South Korea, the Netherlands, Canada, France, Japan, Argentina and Singapore.

Key trends

Spending on IT is forecast to grow 9% this year and will be supported by continued AI infrastructure buildout and improvements, according to S&P Global Ratings**. It stated: “We expect sustained AI investments throughout 2025 given industry comments regarding robust AI demand and hyperscalers’ announced capex plans, benefitting rated semiconductor and hardware issuers.”

According to Deloitte, semiconductors play a crucial role in technology, and sales for these items hit a remarkable $627 billion during 2024***. “The momentum is expected to continue, with 2025 sales projected to hit $697 billion, setting a new record and keeping the industry on track to achieve $1 trillion in sales by 2030”.

Cybersecurity is expected to be another long-term boom area, with the global market expected to be worth $425 billion by 2030****.

Tech companies you may not have heard about

Here we highlight four technology companies that you might not have heard about – and the investment funds that have embraced them.

Adyen

The Dutch financial technology platform, which provides end-to-end payments capabilities and data-driven insights, works with companies such as Uber and eBay. Its stock price has risen more than 40% over the past year, while net revenue in 2024 hit €1.9 billion, representing a year-on-year increase of 23%^. Adyen is the fourth largest stock position in the BlackRock European Dynamic fund with almost 4% of assets under management^^. The portfolio’s lead manager, Giles Rothbart, holds around 50 companies that are either undervalued and/or have good growth potential.

Vontier

The industrial technology company has a diversified portfolio of products used in everything from convenience stores to EV charging stations. The US-based company reassured the stock market in early May 2025 that it had a resilient portfolio and a team that was experienced in navigating challenging environments. Vontier is the second largest holding in the T Rowe Price US Smaller Companies Equity fund^^^, where manager Matt Mahon looks for both growth and value opportunities to help build a diverse portfolio of best ideas.

IONOS Group

The German internet service provider has enjoyed a strong 2025, with its share price having risen sharply on the back of strong financial results. The company’s customer base grew by 80,000 to 6.4 million in the first quarter of 2025, while revenue rose 19.7% to €446.3 million over the same period^^^^. It’s one of the largest holdings in the Janus Henderson European Smaller Companies fund^^, which is managed by Ollie Beckett, Rory Stokes and Julia Scheufler. The managers boast excellent long-term performance and the fund could be considered a core holding for small-cap purists.

Rakuten

This is a Japanese technology conglomerate whose brands are involved in ecommerce, financial services and other forms of digital content. It’s the fifth biggest individual stock holding in the Baillie Gifford Japanese fund, with a 4.4% share of assets^^. This is one of the oldest Japan funds in the sector and boasts an impressive track record of delivering outstanding returns in the toughest of market conditions. We see this as a well-managed portfolio that invests in growing Japanese businesses that deliver consistently strong returns to shareholders.

*Source: Companies Market, 18 July 2025
**Source: S&P Global Ratings, 14 January 2025
***Source: Deloitte, 2025 global semiconductor industry outlook
****Source: AXA Investment Managers, 16 October 2023
^Source: H2 2024 financial results, 13 February 2025
^^Source: fund factsheet, 30 June 2025
^^^Source: fund factsheet, 31 May 2025
^^^^Source: Ionos Outlook 2025, 12 May 2025

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the author and fund managers and do not constitute financial advice.

Technology companies have delivered bumper returns over the past few years due to the enthusiasm for anything linked to artificial intelligence. The so-called ‘Magnificent Seven stocks’, which include the likes of Microsoft, Apple, Amazon and Nvidia, have seen their share prices soar. But what about the other attractive tech names with the potential to outperform that are currently flying under the radar?

 

Here we take a look at some of the most promising companies in this flourishing sector that are held by leading investment funds.

 

Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and tax rules can change. Chelsea does not offer advice and so if you are unsure of anything please contact an expert adviser.

 

Sector overview

 

Before we highlight individual companies and funds, it’s worth pointing out that the global technology sector covers a wide area. This includes everything from cloud computing, software applications, computer hardware and semiconductors to tech-driven platforms, ecommerce and social media. It’s also very much a global area. The largest 100 tech firms by market capitalisation range from Nvidia, with $4.2 trillion, to Kuaishou Technology of China, worth $38.18 billion*. The countries from which they hail include the US, China, Taiwan, Germany, South Korea, the Netherlands, Canada, France, Japan, Argentina and Singapore.

 

Key trends

 

Spending on IT is forecast to grow 9% this year and will be supported by continued AI infrastructure buildout and improvements, according to S&P Global Ratings**. It stated: “We expect sustained AI investments throughout 2025 given industry comments regarding robust AI demand and hyperscalers’ announced capex plans, benefitting rated semiconductor and hardware issuers.”

 

According to Deloitte, semiconductors play a crucial role in technology, and sales for these items hit a remarkable $627 billion during 2024***. “The momentum is expected to continue, with 2025 sales projected to hit $697 billion, setting a new record and keeping the industry on track to achieve $1 trillion in sales by 2030”.

 

Cybersecurity is expected to be another long-term boom area, with the global market expected to be worth $425 billion by 2030****.

 

Tech companies you may not have heard about

 

Here we highlight four technology companies that you might not have heard about – and the investment funds that have embraced them.

 

Adyen

The Dutch financial technology platform, which provides end-to-end payments capabilities and data-driven insights, works with companies such as Uber and eBay. Its stock price has risen more than 40% over the past year, while net revenue in 2024 hit €1.9 billion, representing a year-on-year increase of 23%^. Adyen is the fourth largest stock position in the BlackRock European Dynamic fund with almost 4% of assets under management^^. The portfolio’s lead manager, Giles Rothbart, holds around 50 companies that are either undervalued and/or have good growth potential.

 

Vontier

The industrial technology company has a diversified portfolio of products used in everything from convenience stores to EV charging stations. The US-based company reassured the stock market in early May 2025 that it had a resilient portfolio and a team that was experienced in navigating challenging environments. Vontier is the second largest holding in the T Rowe Price US Smaller Companies Equity fund^^^, where manager Matt Mahon looks for both growth and value opportunities to help build a diverse portfolio of best ideas.

 

IONOS Group

The German internet service provider has enjoyed a strong 2025, with its share price having risen sharply on the back of strong financial results. The company’s customer base grew by 80,000 to 6.4 million in the first quarter of 2025, while revenue rose 19.7% to €446.3 million over the same period^^^^. It’s one of the largest holdings in the Janus Henderson European Smaller Companies fund^^, which is managed by Ollie Beckett, Rory Stokes and Julia Scheufler. The managers boast excellent long-term performance and the fund could be considered a core holding for small-cap purists.

 

Rakuten

This is a Japanese technology conglomerate whose brands are involved in ecommerce, financial services and other forms of digital content. It’s the fifth biggest individual stock holding in the Baillie Gifford Japanese fund, with a 4.4% share of assets^^. This is one of the oldest Japan funds in the sector and boasts an impressive track record of delivering outstanding returns in the toughest of market conditions. We see this as a well-managed portfolio that invests in growing Japanese businesses that deliver consistently strong returns to shareholders.

 

 

*Source: Companies Market, 18 July 2025

**Source: S&P Global Ratings, 14 January 2025

***Source: Deloitte, 2025 global semiconductor industry outlook

****Source: AXA Investment Managers, 16 October 2023

^Source: H2 2024 financial results, 13 February 2025

^^Source: fund factsheet, 30 June 2025

^^^Source: fund factsheet, 31 May 2025

^^^^Source: Ionos Outlook 2025, 12 May 2025

 

 

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the author and fund managers and do not constitute financial advice.