2 FTSE shares taking on US tech giants — and quietly gaining ground
The conversation in global markets often circles back to US tech. The Magnificent Seven still dominate headlines and investor portfolios, with names like Apple, Microsoft and Nvidia setting the pace. But while American stocks grab the limelight, a few homegrown FTSE shares are quietly proving that British technology companies can hold their own.
Two that stand out to me are Sage Group (LSE: SGE) and Computacenter (LSE: CCC). They might lack the trillion-dollar valuations of their Silicon Valley counterparts, but both have carved out profitable niches and continue to deliver for shareholders.
Sage Group: Britainâs software stalwart
Sage has been around since 1981, long before cloud computing was even a term. It specialises in accounting, payroll and payment software, serving small and medium-sized enterprises (SMEs) around the world.
The companyâs shift from on-premises software to subscription-based cloud services has transformed its financial profile. Recurring revenue now makes up over 70% of sales, providing a stable base for growth thatâs boosted the share price 47% in the past three years.
In its latest results, it reported an 11% increase in annual recurring revenue (ARR), with operating profit margins holding steady at around 21%.
Compared to US rivals like Intuit (owner of QuickBooks), Sage trades at a far more modest valuation — a forward price-to-earnings (P/E) ratio of 24 versus Intuitâs 35. That lower multiple could offer better value for long-term investors, especially if subscription growth continues at its current pace.
Computacenter: the infrastructure backbone
If Sage is about software, Computacenter is all about IT infrastructure. It provides technology sourcing, integration and managed services to corporate and government clients.
In an industry where scale and reliability matter, it has built an enviable reputation. Revenue grew 3% in 2024 and income almost doubled in the second half, with the business benefitting from long-term contracts that provide visibility on future earnings.
Yes, operating margins are slimmer than US hardware and service giants like Dell or Hewlett-Packard. But the company’s focus on efficiency and customer retention results in a return on equity (ROE) of almost 20%.
Trading at a forward P/E ratio of just 14 and offering a 3% dividend yield, Computacenter looks attractively priced compared to many US peers â particularly given its payment track record and 40% dividend growth since 2020.
How they compare to US tech
The biggest difference between these British tech shares and their US counterparts lies in scale and valuation. American tech firms often command hefty premiums, reflecting higher growth expectations. That can work in a bull market but it also means bigger price fall risk if sentiment turns.
Sage and Computacenter offer a more measured mix of growth, income and stability. Their valuations are lower, dividend yields higher, and revenue streams more predictable. For investors who prefer less volatility without giving up exposure to the tech sector, these are two stocks worth considering.
While they may never match the explosive share price gains of a surging Nvidia or Tesla, Sage Group and Computacenter show that FTSE shares in the tech sector can deliver steady returns and competitive income.
In an index often criticised for lacking innovation, these two stand out as examples of how British companies can thrive on the global stage — without needing a Silicon Valley postcode.
The post 2 FTSE shares taking on US tech giants — and quietly gaining ground appeared first on The Motley Fool UK.
Should you invest £1,000 in Rolls Royce right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls Royce made the list?
More reading
Mark Hartley has no position in any of the shares mentioned. The Motley Fool UK has recommended Apple, Computacenter Plc, Microsoft, Nvidia, Sage Group Plc, and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
