Casey Murphy has fanned his passion for finance through years of writing about active trading, technical analysis, market commentary, exchange-traded funds (ETFs), commodities, futures, options, and forex (FX).

Over the past couple of years, the technology sector has clearly demonstrated why it is so critical to the effective functioning of today's modern society. Contributions from technology come in the form of modern software solutions, key components within products that individuals and business rely on, and developments within areas such as machine learning and artificial intelligence that will greatly affect how we live and do business in the future.

Based on performance, tech companies have made for great investments over much of the past decade, and from a fundamental perspective, it is reasonable to expect the macro-level trends to continue. As you know, there is no shortage of well-known players that provide us with the products and services that we utilize daily. In fact, the sector is home to the largest companies in the world such as Apple Inc. (APPL), Microsoft Corporation (MSFT), and Google parent Alphabet Inc. (GOOG), which have been strong performers for much of the past decade.

In this article, we'll put the well-known large caps aside and instead take a closer look at some top mid-cap tech companies, medium-sized tech companies that aren't as well known but that warrant closer attention based on their performance and upside potential.

One way to identify top companies from within a niche market segment is to look at the top holdings of popular exchange-traded funds (ETFs) that are designed to track the segment in question. In the case of mid-cap tech stocks, we gathered the top 50 holdings from the five most popular mid-cap ETFs, based on total net assets, and then sorted by the amount of capital invested in each of holding. The top 10 holdings from within the tech sector across the funds and based on the amount of capital invested are presented in the list below.

· Palo Alto Networks Inc. (PANW) · Synopsys Inc. (SNPS) · Fortinet Inc. (FTNT) · Amphenol Corp. (APH) · Cadence Design Systems Inc. (CDNS) · Datadog Inc. (DDOG) · Microchip Technology Inc. (MCHP) · Corning Inc. (GLW) · The Trade Desk Inc. (TTD) · Cognex Corporation (CGNX)

In many cases, when analyzing the top holdings of ETFs based on a certain market segment based on size, it is not uncommon to find holdings that fall outside of the expected range. For example, mid-cap companies typically have a market capitalization between $2 billion and $10 billion, but holdings in mid-cap ETFs, including some of those appearing on the list above, can far exceed this normal range. Strong performance since the time the holding was added to the fund is often the biggest reason for the discrepancy.

Another way to identify top mid-cap tech companies is to comb through the tech holdings on an individualized basis based on fundamentals or technical chart patterns, which is the basis for the companies mentioned in the commentary below.

Aspen Technology, Inc. (AZPN) was founded in 1981 and has a market capitalization of approximately $10 billion as of April 18, 2022. Aspen Technology is a top mid-cap tech company because it is a holding from within the iShares Core S&P Mid-Cap ETF (IJH) and the SPDR S&P MidCap 400 ETF Trust (MDY), which are both designed to track the S&P MidCap 400 Index. The company offers products within the industrial optimization software space and has over 1,700 employees in more than 30 locations around the globe. Aspen Technology is positioned to profit from the continued demand for process modeling using artificial intelligence and machine learning.

Looking at the weekly chart below, you'll notice that Aspen Technology stock has strongly outperformed the Technology Select Sector SPDR Fund (XLK), which is a fund of choice for many investors seeking exposure to the technology sector of the S&P 500 Index. Based on the chart, followers of technical analysis may choose to wait to enter a position after the performance figures converge, while longer-term investors may not be as concerned with the timing of an entry and could expect the trend of outperformance to continue. Regardless of one's strategy, Aspen Technology could be one of the relatively unknown tech companies to watch over the years to come.

Wolfspeed, Inc. (WOLF), formerly known as Cree, Inc., was founded in 1987 and works to innovate on the use of silicon carbide in high power and wireless communications applications across industries such as automotive, aerospace and defense, communications, and renewable energy.

Looking at the weekly chart below, you can see that Wolfspeed shares have fluctuated between periods of outperformance and underperformance relative to the XLK ETF. However, based on the chart, it appears as though the periods of outperformance are becoming more significant, which could signal a shift in the company's underlying fundamentals. With a market capitalization of approximately $14 billion as of April 18, 2022, there is significant upside potential—especially when one considers the ever-growing importance of semiconductors in today's market.

Cognex Corporation (CGNX) is another mid-cap tech company that is well positioned to power the technological shift in manufacturing automation processes.  More specifically, the company offers products across machine vision and industrial barcode readers products to solve some of the manufacturing sector's most challenging problems.

Looking at the weekly chart below, you'll see that the Cognex stock price has sharply outperformed the XLK ETF over the past decade. Based on its current market cap of $12.2 billion as of April 18, 2022, as well as the strong level of performance, investors could expect Cognex to be looked at more commonly as a large-cap tech stock rather than a mid-cap.

Rapid developments in technology and the types of competitive advantages that can be gained using new products or services cannot be ignored. The mid-cap segment of the tech sector is often overlooked by investors in favor of those companies that are hyped by sources such as friends, acquaintances, and the media. However, strong relative performance suggests that this segment is one to consider when making changes to a portfolio.

Companies within the tech sector usually fall within one of the following categories: semiconductors, software, networking, and hardware.

Technology companies have an uncanny ability to quickly launch new lines of business and grow them very quickly. Due to the nature of the products and services, tech companies can quickly reach a global audience. The premiums that investors are willing to pay for the growth characteristics of tech stocks are one of the biggest reasons why share prices are often considered expensive from a valuation perspective.

Competitive advantage refers to the factors that give one entity a better ability to compete than another. For example, automobile manufacturers that embraced technology to aid in the production of their vehicles became more competitive than the ones that did not.

A mid-cap tech stock refers to a medium-sized corporation from within the information technology sector that typically has a market capitalization between $2 billion and $10 billion.

Wolfspeed, Inc. "The New Wolfspeed."