The tech industry has delivered substantial returns over the past year, and the industry is growing at an unprecedented pace due in part to the widespread shift toward remote work structures and the growing demand for automation and digitization. But since a potential increase in interest rates and high Treasury yields could keep popular tech stocks under pressure in the near term, we think it could be wise to bet instead on lesser-known tech stocks Viavi Solutions (NASDAQ:VIAV) and Commvault Systems (CVLT) to cash in on the industry tailwinds. Read on.The shift to remote work structures has helped the tech industry thrive since the onset of the COVID-19 pandemic. Studies show that every second 127 new devices worldwide are connected to the internet. In addition, the number of smart devices collecting and analyzing data is expected to hit 50 billion by 2030.
Spending on artificial intelligence (AI) has increased significantly due the increasing demand for automation over the past years. Furthermore, AI technology is expected to remain a top priority for federal agencies for data collection and storage solutions. The growth of the software industry is evidenced by the SPDR S&P Software & Services ETF’s (XSW) 37.9% gains over the past year versus the SPDR S&P 500 ETF Trust’s (SPY) 27.4% returns.
Since current market volatility caused by factors including an expected increase in interest rates and rising Treasury yields could lead to high-priced popular tech stocks suffering a price decline in the near term, we think lesser-known tech stocks with sound financials—Viavi Solutions Inc. (VIAV) and Commvault Systems, Inc. (CVLT)—could be ideal bets to cash in on the industry tailwinds.