The Motley Fool

3 Tech Stocks That Could Smash The FTSE 100: ARM Holdings plc, Pace plc And Imagination Technologies Group plc

ARM Holdings

It’s been a rather disappointing year thus far for a number of UK-listed tech stocks. Indeed, the likes of ARM (LSE: ARM) (NASDAQ: ARMH.US), Pace (LSE: PIC) and Imagination Tech (LSE: IMG) are all in the red this year, with a weaker wider market not helping to improve sentiment in the three stocks.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

However, their long-term futures look bright and they could be well worth buying a slice of at current price levels. Moreover, they could outperform the FTSE 100 moving forward – here’s why.


Although sentiment in ARM is at a low ebb, the company continues to offer the most reliable earnings growth profile among UK tech companies. Indeed, during the last five years, ARM has increased earnings in each year and is forecast to do the same in each of the next two years.

Certainly, its growth numbers are lower than their previous highs, but ARM still seems to offer growth at a reasonable price as it becomes a more mature and less risky proposition. With ARM currently trading on a price to earnings growth (PEG) ratio of 1.3 and having a nimble, fast-paced business model that is key in its niche, it could be well-worth buying at current price levels.


After issuing a profit warning three years ago, Pace has moved from strength to strength. Earnings have risen by 49% since 2011 and are set to increase further over the next two years at a rate of 12% in the current year and 8% next year.

Despite this, the company continues to offer top notch value for money. This has been aided by a recent fall in its share price, with shares in Pace falling by 39% since March of this year, and means that they now trade on a price to earnings (P/E) ratio of just 9.5. With above average growth prospects, this equates to a PEG ratio of just 0.8, which means that Pace could prove to be a superb play over the medium term.

Imagination Technologies

Also falling heavily this year is Imagination Tech, with its share price being a third lower than in June 2014. Indeed, Imagination Tech is set to disappoint investors in the current year, as its bottom line is expected to be 16% lower than it was last year.

However, this is not an unusual occurrence for Imagination Tech. Over the last five years its bottom line has been hugely volatile but, over the medium term, it generally moves in the right direction. So, it’s of little surprise for this year’s disappointing estimates to be followed by an upbeat growth forecast of 36% for next year.

This puts Imagination Tech on a PEG ratio of 0.5, which means that it offers volatile growth at a reasonable price and, as a result, could outperform the FTSE 100 in the future.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. The Motley Fool UK owns shares of Imagination Technologies. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.