You don’t always have to look for hidden gems. Megacap tech stocks can still deliver solid gains due to their exposure to multiple industries. Many of the companies with trillion-dollar market caps are practically their own portfolios. These firms have several segments in high-growth areas that can reward long-term investors.
Megacaps have been gaining traction and continue to push market indices higher. Investors looking for a boost in their portfolios may want to consider these mega-cap tech stocks.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) offers tremendous revenue growth in multiple sectors. While artificial intelligence has been the highlight since 2023, the firm has several segments achieving high double-digit year-over-year revenue growth.
The tech conglomerate has several businesses hiding underneath the shadow of artificial intelligence. The company’s gaming and professional visualization segments achieved 81% and 108% year-over-year revenue growth in the third quarter of fiscal 2024.
The company’s GPU chips are top-class, and with other semiconductor stocks reporting great earnings, Nvidia is likely to follow. The company’s data center revenue (i.e., artificial intelligence) increased by 279% year-over-year with strong sequential growth as well.
While other high-growth stocks suffer from net losses or lofty valuations, Nvidia still looks reasonably priced. The firm’s 1,259% year-over-year net income growth helped the company reach a forward P/E ratio of 31. The stock’s PEG ratio currently sits at 0.62.
Nvidia’s valuation and growth opportunities make it a compelling pick as artificial intelligence tailwinds continue.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the leader in online advertising. Google and YouTube are two of the world’s most popular websites. Businesses jostle for ad placements for competitive keywords and targeting, and investors can see the trend in Alphabet’s financials.
The tech corporation reported 13% year-over-year revenue growth in the fourth quarter of 2023. This growth rate is an acceleration from the previous quarter and is also higher than the company’s full-year 9% year-over-year revenue growth. Net income increased by an impressive 51.8% year-over-year.
The Google advertising segment is moving in the right direction and was up by 11.0% year-over-year. Alphabet’s relatively small “Other Bets” category almost tripled year-over-year while Google Cloud revenue increased by 25.7% year-over-year. These growth rates are higher than the numbers Alphabet posted in the previous quarter.
Alphabet has been a reliable long-term performer that is a mainstay in many funds. The stock is up by 53% over the past year and has gained 175% over the past five years. The stock’s forward P/E ratio of 23 makes it look enticing.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a tech conglomerate that continues to expand in multiple industries. The company has exposure to artificial intelligence, cloud computing, video games, social media, advertising, PCs, and other verticals.
The entities under the Microsoft umbrella helped the company generate 18% year-over-year revenue growth in Q2 FY24. Net income and diluted earnings per share both increased by 33% year-over-year.
Both of these figures have higher growth rates than the numbers Microsoft posted in Q1 FY24. During that quarter, revenue and net income increased by 13% and 27% year-over-year respectively.
Microsoft is a buy-and-hold stock that has delivered high gains for long-term investors. Shares are up by 65% over the past year and have almost quadrupled over the past five years. Microsoft currently has the highest market cap among publicly traded companies and is likely to hold that title for a while.
Microsoft Cloud was a major growth driver in the second quarter. This business segment achieved 24% year-over-year revenue growth. This makes it one of those megacap tech stocks.
On this date of publication, Marc Guberti held long positions in MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
