5 Technology Services Stocks to Buy for Stellar Returns in Q4

The Technology Services industry has surged 32.9% year-to-date and is expected to outperform the market, fueled by global digitization, AI adoption, and strong demand for multi-cloud and enterprise software. Zacks highlights five stocks within this sector, with AppLovin standing out due to its Axon 2.0 AI engine driving an estimated $10 billion annual ad spend run rate and projecting robust current-quarter revenue and earnings growth of 15.2% and 63.6%, respectively. Other recommended companies, including Skillsoft, Acuity, Byrna, and MediaAlpha, also hold favorable Zacks Ranks, signaling continued investment potential in the sector.

Analysis

The Technology Services industry has demonstrated robust performance, surging 32.9% year-to-date and ranking in the top 24% of all industries, with expectations for continued outperformance over the next three to six months. This momentum is driven by global digitization trends, including advancements in 5G, blockchain, and particularly artificial intelligence (AI), alongside strong demand for multi-cloud and enterprise software solutions. The industry flourished throughout the first three quarters of 2025, with positive sentiment indicating sustained growth into Q4.

AppLovin (APP) emerges as a key player, leveraging its Axon 2.0 AI engine to drive significant ad growth, achieving an estimated $10 billion annual run rate in ad spend from gaming clients. This AI-driven innovation has quadrupled advertising spend on its platform and is projected to fuel a 20-30% year-over-year growth rate. For the current quarter, APP anticipates revenue growth of 15.2% and earnings growth of 63.6%, with recent consensus estimates showing a 1.1% improvement.

Other recommended stocks, including Skillsoft (SKIL), Acuity (AYI), Byrna (BYRN), and MediaAlpha (MAX), also hold favorable Zacks Ranks (#1 or #2), despite varied individual growth forecasts. Acuity projects strong current-quarter revenue growth of 19.5% and earnings growth of 12.3%, while Skillsoft's next-quarter earnings estimate improved over 100% despite negative revenue growth. Byrna shows 21.3% revenue growth but negative earnings growth, and MediaAlpha forecasts over 100% earnings growth alongside negative revenue.

Key Decisions for Investors

• Consider increasing exposure to the Technology Services sector given its strong year-to-date performance and bullish outlook, driven by secular trends in AI and digitization.
• Evaluate AppLovin (APP) for its significant AI-driven ad monetization growth and strong earnings trajectory, monitoring the successful rollout of its Axon platform and self-serve referral platform.
• Review the diverse growth profiles of other Zacks-ranked stocks, such as Acuity (AYI) for balanced revenue and earnings growth, and Skillsoft (SKIL) or MediaAlpha (MAX) for potential earnings leverage despite revenue headwinds, while exercising caution with Byrna (BYRN) due to negative earnings growth.