Technology stocks continue to lead the market higher and artificial intelligence remains the hot trade among investors. So far in 2024, the Nasdaq Composite index is up 9%, while the benchmark S&P 500 has increased by 8% and the blue-chip Dow Jones Industrial Average has risen by 3%. While the rally is broadening out to include retailers, industrial players, and financial services concerns, technology stocks continue to outperform, with many of the top names having gained more than 20% through 10 weeks of the year.
With AI growing at an exponential rate and demand for its products and services remains strong, tech stocks can be expected to continue outperforming in the months ahead. Here are hot stocks: the three best opportunities for investing in technology.
Nvidia (NVDA)
Up by more than 80% year to date, chipmaker Nvidia (NASDAQ:NVDA) is a top-performing stock in both the Nasdaq 100 and S&P 500 indices so far in 2024. This builds on the 240% gain that NVDA stock achieved in 2023. If there’s one hot technology stock for investors to own now, it would be this microchip company. With a market capitalization of $2.20 trillion, Nvidia is now the third most valuable company in the world after Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL).
Increasingly, NVDA stock exerts an outsized influence over the entire market. When the stock dips, the market does too. When Nvidia beats earnings estimates, the market rallies in support. As the leading producer of chips and semiconductors that power AI applications, Nvidia’s demand for its products and expectations for its share price remain sky-high. Analysts currently rate NVDA stock a “strong buy.” There are no sell ratings on the shares.
Meta Platforms (META)
The second best-performing tech stock of the year, and fourth among S&P 500 companies, is Meta Platforms(NASDAQ:META). So far in 2024, META stock has gained 40%. Over the last 12 months, the shares are up nearly 150%. Meta Platforms’ stock really took off after the company announced strong quarterly financial results and its first-ever dividend payment in early February.
Going forward, Meta will pay its shareholders a dividend of 50 cents a share beginning on March 26 of this year. The company also announced an expanded $50 billion share repurchase program. While the rewards for stockholders are nice and the earnings have been impressive, Meta is also seen as a leader in AI and is gobbling up microchips from Nvidia at a fast pace to fuel its growing ambitions in the space.
Netflix (NFLX)
Streaming giant Netflix (NASDAQ:NFLX) is another top-performing stock. NFLX stock is up more than 30% this year and has doubled in the last 12 months. This after the company overhauled its business model, adding paid advertisements to its platform for the first time, cracking down on password sharing, and moving into sports programming.
The end result has been that Netflix added 13.1 million net new subscribers in the final quarter of 2023, crushing forecasts that called for a maximum of nine million additions. Netflix is also one of the only streaming services that is turning a profit and is quickly separating itself from the pack in terms of content and subscriber growth. The strike last year by Hollywood writers and actors appears to have only been a speed bump for Netflix.
On the date of publication, Joel Baglole held long positions in NVDA, AAPL and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
