The technology sector has been on a bullish track in the back half of 2016, cheers to a rebounding U.S. economy that is evident from recently released economic data.

The U.S. economy looks much stable now. The third estimate for GDP shows that the U.S. economy improved 3.5% in the third quarter, faring better than the second-quarter’s marginal increase of 1.4%. Other indicators of this improvement include a rise in Consumer Confidence Index, an improving job market as well as encouraging U.S. factory activity data.

Considering the improving trends, the Fed recently increased interest rates from a range of 0.25–0.5% to 0.5–0.75%. This was the first rate hike in 2016 and the second in the last 10 years. Further, the Fed expects three rate hikes next year, higher than two rate hikes projected in the September meeting.

The recent positive data boosted investors’ confidence. In the year-to-date (YTD) period, the Dow Jones Industrial Average (DIA), Nasdaq Composite (QQQ) and S&P 500 (SPY) gained 14.3%, 8.8% and 10.6%, respectively.

Technology continues to be one of the outperformers. The Technology Select Sector SPDR ETF (XLK - Free Report) has returned 14.2% YTD.

Launched in Dec 1998, XLK is a passively managed fund designed to deliver the returns of the U.S. technology stocks. The fund, before expenses, is expected to remain on par with the returns and characteristics of the S&P Technology Select Sector Index.

Why Go for the Large Caps?

Investing in large-cap companies is a safe bet, especially during economic downturns and stringent credit conditions. Many consider large-cap stocks an essential part of their portfolio, given the stability, healthy dividends and safety cushion they offer.

Large-cap funds are ideal investment options for those seeking high returns. These also come with lower risk than small-cap and mid-cap funds.

4 Large Caps that Outperformed the Market

Today we bring four large cap stocks that not only outpaced the market in 2016 but are expected to perform better in the coming years.

We have taken the help of the Zacks Stock Screener to pick stocks that outpaced the market (especially S&P 500 and Technology Select Sector SPDR ETF) this year. These stocks have a market cap of $5 billion or more.

Also, we are narrowing down our choices with the help of our new style score system. Each of these stocks has a Growth Style Score of ‘A’ or ‘B’ and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are the four stocks:

Applied Materials, Inc. (AMAT - Free Report) develops, manufactures, markets and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry.

Shares of Applied Materials are up 76.8% year to date. With a market cap of $35 billion, the stock has a Growth Style Score of ‘A.’ In fact, over the past 60 days, current quarter estimates have risen from 60 cents per share to 66 cents per share, while current year estimates have risen from $2.27 per share to $2.41 per share.

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APPLD MATLS INC Price and Consensus

APPLD MATLS INC Price and Consensus | APPLD MATLS INC Quote

Broadcom Limited (AVGO - Free Report), formerly known as Avago Technologies Limited, is headquartered in Singapore. The company is a designer, developer and supplier of analog and digital semiconductor connectivity solutions.

Broadcom has surged 24.4% so far this year and has a Growth Style Score of ‘A.’ Over the last 60 days, the stock, with a market cap of $73.3 billion has witnessed upward estimate revisions. The current-year earnings per share (EPS) estimate has been revised upward to $12.10 from $11.40 over the same time frame.

BROADCOM LTD Price and Consensus

BROADCOM LTD Price and Consensus | BROADCOM LTD Quote

NVIDIA Corporation (NVDA - Free Report) has pioneered the art and science of visual computing. With a singular focus on this field, the company offers specialized platforms for the gaming, automotive, data center and professional visualization markets.

Shares of NVIDIA have grown a whopping 224.9% year to date. With a market cap of $57 billion, the stock has a Growth Style Score of ‘B.’ Adding to the positives, the Zacks Consensus Estimate for fiscal 2017 increased to $2.43 from $1.86 over the last 60 days as all 10 analysts revised their estimates upward.

NVIDIA CORP Price and Consensus

NVIDIA CORP Price and Consensus | NVIDIA CORP Quote

Cognex Corporation (CGNX - Free Report) designs, develops, manufactures and markets machine vision systems that are used to automate a wide range of manufacturing processes where vision is required.

So far this year, Cognex has gained 91.9%. With a market cap of $5.5 billion, the stock has a Growth Style Score of ‘A.’ The Zacks Consensus Estimate for fiscal 2016 increased to $1.58 from $1.41 over the last 60 days as five out of six analysts revised their estimates upward.

COGNEX CORP Price and Consensus

COGNEX CORP Price and Consensus | COGNEX CORP Quote

Conclusion

The list is by no means exhaustive and there are several other tech stocks that did well this year as the industry continues to evolve and attract the brightest minds. The above-mentioned large caps stocks have snatched the spotlight with striking performances and rising earnings estimates. With this in mind, we believe investing in these stocks will yield strong returns for your portfolio in the short term.