The Best Tech Stocks to Invest In
Many billionaires and millionaires became wealthy by investing their money. Investing is an essential part of multiplying your money. Technology has become a big part of our lives, and there are many opportunities in the tech industry for investors. There are many potential investments in artificial intelligence, 5G, and the internet of things.
When looking to invest in technology, it’s not always easy to discover the right company. However, after reading this article, you will know what qualities to seek.
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Best Tech Companies to Invest In
Cybersecurity, Cloud Computing, Electric Vehicles, and The businesses that offer their services in these spheres will continue to enjoy prosperity in 2022. Some companies might make their investors a lot of money in the next few years.
American corporation Cloudflare Inc. provides security systems such as DDoS mitigation and content delivery networks. Intelligent WAF and Bot Management are part of their advanced security systems.
Cloudflare made $138.1 million in the first quarter of the fiscal year 2022. Its GAAP gross profit (profit after taking out expenses) skyrocketed to $106.0 million. This highly recommended stock is estimated to hit $135.00.
Some investment analysts believe that the stock prices for Cloudflare will continue to increase. It is because of the expected growth in the cybersecurity sector.
Nvidia Corporation, situated in Santa Clara, California, creates visual processing units for the professional and gaming markets. Currently, the company is leading the computing and automotive products market by producing system on chip (SoC) units. Nvidia has embraced tech revolutions in AI, machine learning, and deep learning.
Nvidia offers augmented reality, virtual reality, and edge computing technologies. During the first fiscal quarter of 2022, Nvidia earned $5.66 billion. Nvidia Gaming achieved a new revenue record of $2.76 billion. Investment analysts are optimistic about Nvidia’s stock and predict it will reach $250.00 per share. Nvidia had a great year in 2021 thanks to its innovative products; this company is a good investment option for anyone looking for solid returns.
Salesforce is an American company that makes software for businesses. The software helps businesses keep track of their customers and ensure they have a good experience.
This software-as-a-service (SaaS) platform enables businesses to purchase business software on a subscription basis. Salesforce’s first quarter revenue in the fiscal year 2022 rose to $5.96 billion. The first quarter’s GAAP operating margin is 5.9%.
It is estimated that the value of this software-as-a-service platform will come to $320.00. Most research on the stock market recommends that you purchase Salesforce shares. Salesforce is keeping up with the latest industry trends, which will be to the benefit of both its current and potential investors.
Tesla is an American company that develops electric cars for a sustainable future. Tesla has many products, including electric vehicles, solar panels, roof tiles, and energy storage home systems.
Starting from 2021, all Tesla models will come with full self-driving mode. This mode will let the car drive through traffic, switch lanes and stop at red lights. By using advanced software capabilities, Tesla has made autonomous driving a reality.
Tesla is a favorite stock for technology investors. Some people think the company’s future looks good because of the rise of autonomous vehicles. Investment analysts are optimistic about Tesla and say it could reach $1471.00 shortly. They recommend that people buy stocks in Tesla.
Zoom Video Communications
Zoom is a communication technology company that became very famous in 2020. They provide video calling services through their cloud-based software. This software lets people have business meetings, online classes, and virtual get-togethers.
Zoom has entered the healthcare market by providing a way for healthcare professionals to connect with patients through video calling. This feature allows professionals to monitor patients remotely.
Zoom’s revenue for the first quarter of 2022 was $956.2 million. Its GAAP Net Income for the first quarter was $ 227.4 million.
Zoom will stay popular even in 2022. That is when a lot of other companies are going to start using a hybrid working model. Investment analysts think Zoom’s stock will be worth $525.00. They are advising people to buy stocks in Zoom Video Communications.
Synnex Corporation is an American company that provides customers with logistics, technology solutions, and professional services. Synnex also provides support before and after-sales. They focus on security, collaboration, networking, and data centers.
This company offers multiple services and has a lot of potential for growth in the upcoming years. Synnex’s first quarter revenue for the fiscal year 2022 was $4.9 billion, which is 21% higher than its previous fiscal quarter. Non-GAAP operating income was $142 million.
Investment analysts have found that the stock price for Synnex Corporation is going to go up shortly. It is expected to reach $155.00 in the next few months. This increase is due to the manifold growth that the company is experiencing, and analysts are advising investors to buy stock in Synnex Corporation now.
CDK Global Corporation
CDK Global is a prominent American company that provides technology solutions to the automotive, heavy truck, and equipment industries. They use artificial intelligence (AI) to provide advanced analytics, which helps improve their partners’ IT infrastructure and retailing services. CDK is a cutting-edge company that uses data-driven technologies to provide automated solutions.
This company is diverse, and some investment analysts are optimistic about it. They think it could do better than some big market players. People are advised to buy stock in CDK Global Inc.
The Best Tech Stocks to Buy
One of the most exciting stock market segments is the technology sector. There are innovations every day, and when they become popular, the companies that made them make a lot of money.
So, it’s not surprising that technology is a popular sector on the market. As with any other industry, some technology companies are winners, and some are losers. After investing in the latter, you do not wish to be left holding the bag.
Best Technology Stocks
The best technology stocks are often well-known brands. People are interested in technology, so these companies make a lot of money. But you shouldn’t just pick a stock because it is a famous brand. It would be beneficial if you considered more factors.
The best stocks in the sector have reached the point where they can’t grow much more. They are constantly innovating and competing to stay on top.
1. Amazon.com, Inc.
You cannot discuss the leading technology stocks without discussing Amazon.com.Amazon is a company known for being an e-commerce giant, and many people likely shop on its website.
AMZN saw an increase in sales during the coronavirus pandemic. People were told to stay home, so they started shopping online. AMZN is the most popular online retailer in the United States.
Even though the economy has reopened, Amazon’s revenue growth has not gone backward. Amazon has continued to grow its revenue each quarter, although that growth hasn’t always met expectations.
Amazon is entering a new part of its business. It could get interesting quickly. The company has always focused on increasing revenue with very thin margins. But this model only works if you haven’t already saturated the market, which Amazon has done. With revenue growth beginning to slow, the company needs to focus more on improving margins.
The company is doing this, but the market has not yet considered the company’s stock price. The company has become a powerhouse in cloud computing thanks to its Amazon Web Services (AWS) brand. This brand is popular with artificial intelligence developers. The software-as-a-service business model has attractive margins and the potential to increase the company’s earnings per share rapidly.
There is also a strong argument that Amazon is undervalued. The stock price has fallen throughout 2022, and the price-to-earnings ratio (P/E) is still high. But this is a discount from the company’s historical valuation.
The corporation just underwent a stock split, bringing the price of shares within reach of the typical investor. It usually leads to a gain in the price, but it has not boosted AMZN yet. There is likely even more room left to climb. According to TipRanks, AMZN is the third most popular stock in exchange-traded fund portfolios. It has an average “Strong Buy” analyst rating.
Overall, Amazon.com has had some problems and will have some in the future. However, the company is very successful in eCommerce, expanding into cloud computing and other areas. The current low stock price is a bonus.
2. Apple, Inc.
Apple is a company that became popular by being innovative. It is the most popular stock in ETF portfolios and the largest company in the United States. It is also the second-largest company in the world, second only to Saudi Aramco.
Warren Buffett has long been a fan of the stock. But when the selloff in tech stocks scared many people away from it in early 2022, Buffett and his firm, Berkshire Hathaway, started buying up shares.
Apple is one of the market’s most exceptional stocks in terms of cash flow. After the first quarter, its cash balance was $193 billion. It was more than its total debt. At the beginning of the year, there were some questions surrounding the company’s ability to keep revenue growth moving in the right direction because of dwindling consumer confidence. But it seems that that issue is in the past, considering its strong Q1 performance.
The stock’s price has gone down a lot this year. It is down more than 24%. Although this may appear negative, it is terrific news.
People like Warren Buffet are buying a lot of Apple stock because the price has decreased recently. It is an excellent investment opportunity since the stock may recover, and you will profit. Some might say this is because of the bad economy, but Apple has been through hard times before and came out okay. Even if Apple had to pay all its debts, it would have more than $70 billion to keep growing.
Apple is a firm noted for its innovative nature. It is likely that betting against the company now would be the wrong decision.
3. Microsoft Corporation
Microsoft was first launched as a company that makes personal computers. But when the PC industry started to decline, Microsoft changed gears and started making software. Today, Microsoft is one of the largest companies in the world. And most of what Microsoft does is make software.
If you use Microsoft Word, Excel, Outlook, or Teams, you are using Microsoft-branded products. In recent years, the company changed how it sells software. It stopped selling disks once per year and started using a Software-as-a-Service model. It significantly reduced costs and increased profits, resulting in significant improvements in free cash flow.
Even though we are talking about one of the most successful software companies in history, it trades at a historically low price-to-earnings ratio. It is because people are overreacting to two things:
- General Downward Tech Stock Trend. Technology stocks have been downward this year, and Microsoft is among those caught in the loop. Fears over economic, geopolitical, and social conditions are causing valuations to stay low.
- Activision Blizzard Takeover. Microsoft has announced that it will complete its acquisition of Activision Blizzard in January. The deal has not gone through because the Federal Trade Commission is pushing back. Microsoft wants the acquisition to happen because they want to get into the metaverse. Still, investors are worried that it won’t happen.
Don’t worry; Microsoft has been in business for a long time. It’s been through many tough times and always comes out on top. So the recent selloff caused by fear is probably not as nasty as it seems.
Regarding Activision Blizzard, the takeover will give Microsoft a way to get into the metaverse. It is a world where people can be in different places simultaneously. Some people have been against this deal, but Microsoft has been gaining support. Even the labor union recently approved it.
Second, Microsoft CEO Satya Nadella probably has a backup plan even if the deal falls. So the fears are likely overblown. The good news is that because of these fears; the stock is discounted. It makes Microsoft one of the strongest software companies in the world.
4. Alphabet Inc
Alphabet is one of the world’s largest corporations. It owns numerous dominant brands, such as:
- Google. According to Statista, the preeminent search engine controls 28.6% of U.S. digital advertising spending.
- YouTube. 81% of Americans use the social media giant YouTube, according to Statista.
- Android. StatCounter reports that Android devices account for 71.86 percent of all mobile devices worldwide.
Most companies only do well in one area of business. Alphabet, however, is good at multiple things. But that’s not the best part. Its recent earnings reports show it is still doing well, but its stock prices have decreased because of a tech selloff. Consequently, this premier technology business with demonstrated growth sells at the same price as the S&P 500.
Alphabet’s stock price is lower than it has been in the past. It may be because people think Alphabet won’t do as well in the future. But Alphabet is still a strong company. It is a dominant player in many areas and is likely to stay successful. There has been no real reason for the stock to fall, but it has anyway.
Some people say it is an excellent time to buy stocks when people are afraid. It is because they think there might be a recession soon, and the company’s revenue might go down. Even if this happens, the company has a lot of cash and will be able to survive. But there is also a chance that these things will never happen.
But even if they do, the stock prices have already considered this, making Alphabet stock a good buy.
5. Netflix Inc
Netflix is not a company you would usually think of as being a good investment right now. The company’s shares have decreased more than 70% this year, and many things are against it.
Netflix recently reported that it lost 200,000 subscribers. It is the first time they have had a reduction since they became a publicly traded company. People are wondering why this happened and what Netflix will do to fix it.
Netflix said the drop in active users results from a couple of factors. Netflix estimates that 100 million individuals are accessing its services for free by sharing passwords. The corporation also pointed out that the industry is flooded with competition. Netflix expects another substantial drop in active users in the current quarter because of this competition.
Although it is a risky investment, there are a few reasons to consider investing in NFLX:
- Belt Tightening. Management knows what is going on and is taking action. They have laid off 2% of the company’s workforce and have slashed budgets in multiple other areas. It will likely increase margins.
- Controlled Costs of Programming. Netflix has learned what makes a good show over the years. It has paid a lot of money for some failed projects, but it is now focusing on producing fewer shows at a reasonable cost. The company expects these new shows to be successful, so it is willing to spend more on production costs.
- Password Sharing Crackdown. Netflix is working on a solution for people who share passwords. If they find a solution, 100 million users will have to pay for the service if they want to keep using it.
- New Tier. Netflix also plans to create a new service that will show ads. It will help the company make more money and attract more users.
- Undervaluation. Netflix’s stock has lost a lot of value since the beginning of the year. The stock is now selling for a meager price, and if the company’s plans work out, the stock could go up a lot.
Netflix is a risky investment. The company may have reached its peak. Nevertheless, the stock is trading at a discount. It represents a company that has been through hard times before and has come out stronger. The management team seems to understand the situation. If everything goes well, Netflix could become a massive success in your portfolio.
6. Roku Inc
Netflix was created in 1997, but it was hard to watch on TV. Roku changed that in 2008 when it made a streaming device. Today, Netflix is still available on Roku, but there are many more options than just Netflix.
Roku technology comes standard in many smart TVs. Innovation and dominance in the streaming sector are interesting, but it makes most of its money from targeted advertising today.
Roku had 60 million users streaming around 21 billion hours of video in the first quarter. It shows that Roku has a lot of people interested in their product. Due to its significant decline, this year may be the greatest moment to buy Roku stock. The stock has lost more than 60% of its value so far.
This company is not as bad as people think. Many problems are because the company lost money, but that was because of some supply chain issues. The great news is that these problems are expected to persist for only a short time. Once fixed, Roku will become profitable again and could even become a growth stock, which would mean more enormous profits for investors.
Technology makes everything simpler. It has helped to create many growth-related factors that have changed human history. Technology is constantly advancing, so no sector can compete with it. Even though investing can be risky, it might make someone a billionaire. But investing in technology is a safe play because this sector has much growth potential.
Frequently Asked Questions About Best Tech Stocks
In finance, “FAANG” refers to five well-known American technology companies: Facebook, Amazon, Apple, Netflix, and Alphabet.
The technology stocks like Amazon and Netflix had a great run during the pandemic. Stimulus money and higher demand drove their prices up. But the tech sector has not been doing well in 2022. The Nasdaq Composite is down around 23% for the year after going up 21% in 2021.
Investing in tech stocks can be an excellent way to increase your returns. It is because tech stocks tend to grow faster than other stocks. When interest rates are low, investing in companies with excellent growth potential might be lucrative. It will help you earn more money over time.