When it comes to cutting edge technology, sometimes it’s more important to focus on value than it is to focus on cost. Yeah, you can get a cell phone for $9.99… but don’t expect it to play digital music or let you check your email. You can get a flat screen for under $500… but it will only be a tiny 32-incher.
The same is true for tech stocks. There are some companies out there with shares trading for peanuts, but investors get what they pay for. On the other hand, stocks like Google are trading around $600 a share for a reason.
I know it’s intimidating to see stock prices that high, but don’t get turned off simply by the sticker shock. Many tech stocks are great buys even at over $100 a share. Let me give you a few examples with these five pricey tech stocks that are worth every penny.
Tech Stock #1 – Amazon.com (AMZN)
The world’s largest online retailer, Amazon.com (AMZN) is currently trading for over $130. Fueling the surge has been a stunning Q3 report where the company obliterated earnings estimates, prompting shares to skyrocket 26% in one day. And shares have continued to race up in December on strong holiday sales and the dominance of AMZN’s Kindle e-reader. I rate this stock a bargain for anything less than $150 a share, so buy with confidence.
Tech Stock #2 – Apple (AAPL)
It’s easy to see why Apple (AAPL) is leading the tech revolution, from digital media distribution to smart phones to personal computing. The company’s iPod and iTunes lead the digital music industry, and the iPhone is one of the hottest gadgets out there. AAPL also hasn’t forgotten its personal computing roots and has cut into the dominance of Windows with its OS X operating system and fleet of Mac computers. The company has topped earnings estimates by over 15% for each of the last four quarters and is still riding high on the success of its international iPhone rollout. Shares are trading for about $200, but keep buying Apple until it crosses the $217 mark.
Tech Stock #3 – Baidu (BIDU)
Baidu (BIDU) is the leading Chinese-language Internet search engine, with more than 70% of China’s search market. Some people say this company is China’s Google, but in fact this company is faring even better than that iconic company since Google’s head in China recently resigned after failing to challenge BIDU. Just like Google, Baidu is trading at a very high level right now — to the tune of about $400 per share. However, I rate this stock a strong buy under $474.
Tech Stock #4 – IBM (IBM)
Formally International Business Machines, IBM (IBM) develops and manufactures information technology products and services worldwide. From PCs to servers to software to semiconductors, this stock is a true global tech player. While many tech firms are chasing the next big personal gadgets, IBM is content to continue its dominance of the mainframe and server market. The bottom line is that other tech companies have ceded this part of the computer market to IBM — and it is thriving as a result. Shares are trading above $120 right now, and I would be OK with your buying IBM up to $145 per share.
Tech Stock #5 – Priceline.com (PCLN)
Priceline.com (PCLN) allows buyers to name their own price for everything from airline tickets to rental cars to cruises. With its patented business model, the company generates virtually all of its sales from travel-related services. In the case of airline tickets and hotel reservations, Priceline.com keeps the difference between the price paid by the individual and what Priceline.com paid for the ticket or hotel room. You may not think that travel spending is very high right now, but the bottom line is that value-conscious consumers really love Priceline’s ability to “haggle” on prices. This has allowed the website to become an oasis for cash-strapped consumers and generate huge numbers even during the recession. PCLN is currently trading around $220, but I would be confident buying shares of this stock as long as they’re below $249.
These must-have companies are just hitting their stride and are poised to outperform the market in the short-term. Investing pro Louis Navellier reveals his top five picks for 2010 in this free stock guide — download your FREE copy here.