The Federal Reserve is expected to begin tapering later this month. The obvious implications for the market and for investors in tech stocks are broadly negative.
However, investors wouldn’t know this by looking at the stock market. Valuations have absolutely skyrocketed through the end of the year, as appetite for risk assets remains very high.
Regardless of this tapering schedule, it’s expected interest rates may not rise until mid- to late-2022. Interest rate hikes are the real concern for investors, but that bucket continues to get kicked down the road. It appears accommodative monetary policy is here to stay. At least, that’s what the market is pricing in right now.
For tech investors, this is a tricky market to assess right now. On the one hand, there’s a reason why the market is pricing in a lower-for-longer interest rate environment. For governments, the ability to raise money via the bond markets at near-zero interest rates is obviously advantageous. While inflation is indeed picking up, there may be an argument to be made that this near-term inflation is transitory. All this remains up in the air right now.
Accordingly, picking top tech stocks in this current environment is not an easy task. Let’s dive into seven top tech stocks that may certainly be worthy of attention right now:
- Meta Platforms (NASDAQ:FB)
- Adobe (NASDAQ:ADBE)
- Global Payments (NYSE:GPN)
- ASML (NASDAQ:ASML)
- Medtronic (NYSE:MDT)
- Matterport (NASDAQ:MTTR)
- Shopify (NYSE:SHOP)
Top Tech Stocks to Buy: Meta Platforms (FB)
One of the stocks I think is truly world-class and worth owning for a very long time is Meta Platforms. Formerly Facebook, Meta is a social media company looking to make big headway into the Metaverse. And with all the hype surrounding the Metaverse right now, this is a company that’s unsurprisingly taken off recently.
That said, FB stock remains approximately 10% off its all-time highs right now. Investors appear to remain cautious with respect to social media-related stocks right now. And Meta/Facebook is also a company that’s been embroiled in some pretty nasty legal issues of late (Hence, the widespread belief that this name change was intended to shift the public’s focus to something else).
However, looking at the numbers, and the company’s underlying Facebook business, Meta Platforms is certainly a stock worth considering. Facebook is still growing its top line at around 35% per year. This is a company that brought in $29 billion this last quarter alone. Additionally, Facebook is sitting on $58 billion in cash as of this past quarter, raking in net income of more than $9 billion a quarter.
These numbers are impressive. Accordingly, for those seeking a company with a rock-solid business model and strong long-term growth trajectory, Meta is a company worth considering right now.
In the software space, Adobe remains a top pick for many long-term investors looking for blue chip tech stocks right now. This US-based software giant is famous for its suite of content creation, digital design and other creative software products. From Acrobat to Photoshop, Dreamweaver, InDesign, and Illustrator, this is a company that has cornered the market to some extent in the creative software space.
Adobe has seen tremendous organic and M&A-related growth over the years. Investors in ADBE stock have continued to benefit from consolidation in this sector and Adobe’s strong core software brands.
As a long-term holding, there’s a lot to like about Adobe. As the economy continues to digitize, a trend that was accelerated by the pandemic, Adobe should continue to reap the benefits of this catalyst long-term. Accordingly, this is a stock that remains on my radar right now as a top potential portfolio addition on any dips.
Top Tech Stocks to Buy: Global Payments (GPN)
Among the companies that clearly benefited from the pandemic is Global Payments. As a leading fintech firm focused on processing online payments, this is a stock that outperformed the market last year. However, this year hasn’t been so friendly to investors in GPN stock.
Much of this may be due to a more muted growth outlook moving forward. As with many stocks that surged during the pandemic, a return to normal doesn’t provide much in the way of bullish sentiment for such stocks. Additionally, the company’s strong, but disappointing, growth this past quarter doesn’t seem to compel many hyper-growth investors to consider this stock.
Global Payments brought in $2.2 billion this past quarter, compared to $1.92 billion for the same quarter the year prior. That’s good for top-line growth of nearly 15%. However, many investors seemed to want to see more on this front.
That said, for those bullish on the longer-term shift toward online payments, Global Payments is certainly a stock that may be viewed as cheap at these levels. Currently, the company remains about 45% off its 52-week highs, suggesting there may be some value to be had here.
A company many investors may not have heard of, ASML is a leading Netherland-based company involved with the manufacturing of photolithography systems. These are used in semiconductor production. Top chip makers like Taiwan Semiconductor Manufacturing (NYSE:TSM) and Intel (NASDAQ:INTC) are some of the major clients of ASML.
The company’s extreme ultraviolet technology (EUV) is instrumental in the production of some of the smallest computer chips. According to CEO Peter Wennink, the ongoing global digital transformation coupled with a shortage of chips has propelled ASML to meet increased demand worldwide.
Consequently, the company posted a successful third quarter, beating income estimates. Q3 reports say the tech company posted quarterly revenue of $6.08 billion with a gross margin of over 51%. Earnings per share beat estimates, and the company raised its forward-looking outlook. Those are certainly good things for investors considering this stock.
ASML shares are currently trading at around $850, up about 64% year-to-date. This stock doesn’t look cheap. However, there are strong long-term secular growth catalysts underpinning this name, which is why I like this stock right now.
Top Tech Stocks to Buy: Medtronic (MDT)
The next entry on the list of top tech stocks to invest in right now is an Ireland-based company involved with the manufacturing of medical devices. Medtronic is one of the largest medical component manufacturers globally. This company is noted for its cardiovascular, surgical, diabetes and neuroscience-related instruments.
In addition to having a diverse pipeline of products, this medical-device company focuses on an innovation-driven strategy. This is a company that has shown consistent and strong growth in the past. And the company’s pipeline of products remains world-class in this regard.
For instance, Medtronic has developed the Hugo platform, which is poised to become a great player in the robot-assisted surgery market. Indeed, Medtronic’s Hugo platform is likely to continue to face competition from Intuitive Surgical’s Da Vinci system. However, there’s a tremendous amount of potential growth in this space, and Medtronic is a company looking to grab a bigger piece of a rapidly growing pie.
This company’s recent earnings were downright impressive. Medtronic posted revenue growth of 23% and bottom line adjusted earnings growth of 127%, on a year-over-year basis. For those who like the growth trajectory of the medical devices space, this is certainly a stock to consider right now.
California-based Matterport has been one of the hottest names in the tech sector lately. This company provides 3D space capture services, converting photographs into immersive and engaging 3D representations. In other words, this is yet another metaverse-related play.
Currently, Matterport’s software is being heavily utilized in the housing sector. A number of high-profile tech clients in this space use Matterport’s services to create 3D renderings of houses for showings and listings online. Those who have walked through a unit without actually visiting may have inadvertently used Matterport’s product.
This is a company that has seen strong growth this year, posting double-digit revenue growth. However, those bullish on the Metaverse point to companies like Matterport as future beneficiaries of this trend.
This company currently trades at about a 15% to its 52-week high, and has a tremendous amount of momentum right now. Accordingly, MTTR stock may not be cheap. However, for those seeking momentum-driven stocks with upside right now, MTTR is one stock to watch.
Top Tech Stocks to Buy: Shopify (SHOP)
Last but certainly not least, we have Shopify. Shopify is actually among the fastest-growing companies on this list.
Shopify’s long-term top and bottom line growth has been impressive. Indeed, this is a company that’s shown it can grow into its valuation.
Like many other hyper-growth e-commerce players, Shopify’s valuation has been sky-high in recent years. However, continued rapid growth has made this company’s valuation more tenable of late. A provider of a platform that allows merchants to create an online business, Shopify has certainly benefited from the pandemic. However, what’s interesting about this company is that growth has not slowed as much as investors initially thought following the return to work mandates taking place now.
The world’s shifting toward e-commerce aggressively. And right now, Shopify remains a leading option for investors looking at a way to play this space in this difficult-to-assess environment.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.