The year 2023 has been a volatile one for the equities markets, especially for the technology sector. The Nasdaq 100 Composite entered correction territory in October as investors began to worry about high valuations and the potential for interest rates to be high for a long period. However, the recent October CPI report and other labor market data showed inflation is indeed easing as the U.S. Federal Reserve desires. That boosted market sentiment and sparked a broad rally, which could extend until the end of the year.
Among the tech stocks benefitting from this rally, three stand out for their long-term growth potential.
Nvidia (NASDAQ:NVDA) needs little introduction at this point. Any investor who bought Nvidia towards the back-end of last year, when the stock plummeted more than 50%, has experienced great returns into 2023. The chip stock has defied all odds this year despite an ongoing chip slump that has tempered the rise of some competitors’ shares.
A lot of Nvidia’s strong earnings results this year have had to do with its A100 and H100 chips. These chips help to power the elaborate large language models (LLMs) used to train AI models that undergird advanced applications and programs. As the chip slump comes to an end and demand for AI chips continues to increase unabated, Nvidia could likely see its earnings increase significantly in the near term, benefitting both the company and its shareholders.
SPS Commerce (SPSC)
SPS Commerce (NASDAQ:SPSC) provides cloud-based supply chain management solutions that help retailers, suppliers and logistics firms collaborate and optimize operations. The company’s omnichannel suite of solutions includes fulfillment and analytics products helping to connect retailers and grocers with suppliers and distributors through order management automation and compliance enablement. Retailers and grocers using the platform are also given tools to manage product inventories and gauge supplier performance.
The company has been growing its revenue and earnings at a consistent rate for more than a decade, thanks to its high customer retention, recurring revenue model and expanding network of partners. SPS Commerce also benefits from the increasing adoption of e-commerce and omnichannel retailing, which create more demand for its services. In recent years, the company has seen its top-line growth rate increase.
For investors looking for exposure to supply chain software solutions working to transform a variety of industries, SPS Commerce could be a great candidate for a long-term investment.
CrowdStrike (NASDAQ:CRWD) is a cybersecurity company offering cloud-based endpoint protection and threat intelligence solutions that protect organizations from various types of cyberattacks.
To hop on the artificial intelligence (AI) train, CrowdStrike has rolled out new AI tools, including its Charlotte AI, to detect and prevent sophisticated cyberattacks from various sources. CrowdStrike also leverages its massive data set and AI capabilities to continuously improve its products and services.
CrowdStrike’s AI solutions could help expand the cybersecurity firm’s market share while also propelling its stock to new heights. Shares have risen more than 101% since the start of the year, surpassing many cybersecurity peers. The stock price could appreciate further as the market enters another rally.
On the date of publication, Tyrik Torres did not hold (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.