The tech sector is filled with innovative companies generating impressive returns for their shareholders — the S&P 500 and Nasdaq 100 lean heavily into this industry.
Investors who dig deep enough into tech can find many corporations with the potential to outperform the stock market. However, some tech stocks are riskier than others. Furthermore, the potential upside is massive for some tech companies, while others have limited gains from their current price points. These are some of the top tech stocks to buy for long-term gains.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has been outpacing the stock market as its AI chips experience robust demand. The firm’s Q1 FY25 results indicate sales aren’t slowing down. Revenue rose 262% year-over-year, while net income surged 628% year-over-year.
Those financials have translated into incredible stock gains. Nvidia has already more than doubled over the past year and has 5-year gains that exceed 3,000%. The company’s recently announced 10-for-1 stock split has strengthened the stock’s appeal among investors.
Big corporations are continuing to invest in artificial intelligence. As more capital pours into the industry, Nvidia stands to reward its shareholders even more. The company is approaching a $3 trillion market cap and has a shot at becoming the world’s most valuable publicly traded corporation by the end of the year.
Wall Street analysts are increasingly bullish on the stock and project an 11% upside. Nvidia is rated as a “Strong Buy.”
Meta Platforms (META)
Businesses will continue to pour billions of dollars into advertising campaigns every month. However, these same companies will walk away from advertisements that no longer yield profits. It’s the main reason businesses have pulled back on newspaper ads. Revenue from that advertising channel is down by roughly 60% over the past decade.
That’s not good for the newspaper industry, but all that extra money must go somewhere. Meta Platforms (NASDAQ:META) is attracting plenty of that capital. Its top-tier targeting features make it easier for advertisers to display the right message to the right people at the right time.
Few advertising platforms can compete with Meta Platforms, and this is shown in the company’s financials. Revenue increased by 27% year-over-year in Q1 2024. As a bonus, net income more than doubled year-over-year as the company became more efficient. It’s been a boon for investors as the stock is up by 38% year-to-date and has gained 169% over the past five years.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) got its start with e-commerce. Many people still use the company’s online marketplace to buy millions of products from the comfort of their homes. Amazon’s vast shipping network allows most products to arrive at their intended destinations within 1-2 business days.
This core component of Amazon’s business model resulted in 13% year-over-year net sales growth in Q1 2024. Domestic and international sales both had double-digit growth rates. While online marketplace sales were good, Amazon is seeing more growth in some of its other segments. For instance, Amazon Web Services revenue growth accelerated to 17% year-over-year. Artificial intelligence is creating more demand for the company’s cloud computing solutions.
Advertising, streaming, and groceries also experienced solid growth and can help the stock reach new heights. Wall Street analysts have rated the stock as a “Strong Buy” and believe it can gain an additional 22%. Each of the 42 analysts following the stock rated it as a “Buy.”
On this date of publication, Marc Guberti held long positions in NVDA and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
