If you want to beat the market these days, you need to be investing in A-rated tech stocks. The technology sector, by far, has been the best stock market sector for the last several quarters, thanks to the advances in artificial intelligence and machine learning.
Despite a recent pullback, the tech-heavy Nasdaq composite is up more than 30% in the last 12 months, topping both the S&P 500 (22% gain) and the Dow Jones Industrial Average (13% gain).
A-rated tech stocks make ideal picks for growth investors because the sector is full of companies known for rapid growth and innovation. Tech companies are often on the ground floor of the most market-moving advances — like generative AI — that can revolutionize the world.
As technology becomes a greater factor in today’s world — playing a key role in banking, industry, energy, commerce, aerospace and manufacturing — tech companies can capitalize since they play an increasingly crucial role in everyday life.
The best way to find A-rated tech stocks is to use the Portfolio Grader. The Portfolio Grader is a free tool that ranks every stock on an “A” through “F” scale based on earnings performance, growth, analyst sentiment, momentum and other factors.
If you’re looking to buy into some of the hottest stocks in recent months, these names are poised to deliver.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has been my top choice in any list of A-rated tech stocks for a while now. And why not?
The chipmaker has as much as a 90% share in the high-powered graphics processing units that are most responsible for generative AI applications. And Nvidia has more up its sleeve — its GB200 Blackwell processor that’s coming out later this year is estimated to be four times faster than the H100 GPU.
Nvidia had massive growth in 2023 with its stock price of 239%. While there are fears that Nvidia’s growth may stall out in the beginning of this year as companies wait for the Blackwell processors, I think that the demand for generative AI is still going to power NVDA stock through the first half of the year.
NVDA stock is up 61% in 2024 and gets an “A” rating in the Portfolio Grader.
Palantir Technologies (PLTR)
Investors in Palantir Technologies (NYSE:PLTR) have just as much reason to be bullish as their peers who hold NVDA stock. Palantir is up 164% over the last 12 months as the company’s commercial division showed rapid growth.
For years, Palantir made its bread and butter by serving the intelligence and defense industries, using machine learning and artificial intelligence to provide real-time analysis to the Pentagon.
But in the last quarter of 2023, Palantir saw 32% growth in its commercial segment, totaling $284 million in revenue. That compares to $324 million in government contract revenue in the quarter — but only 5% growth in that segment.
I’m expecting the commercial revenue to top the government revenue soon. Palantir’s new Artificial Intelligence Platform works with both government and commercial clients. And Palantir also has a new agreement with Oracle (NYSE:ORCL) that will allow Palantir to use Oracle’s cloud network to deploy products such as its Gotham and AIP platforms.
In all, I think that the recent pullback in PLTR stock makes for a great buying opportunity for a company that’s only going to grow for the rest of 2024 — and possibly beyond.
PLTR stock gets an “A” rating in the Portfolio Grader.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) is one of the first — and best — streaming companies. And it has proven to be able to adapt even in the face of massive competition to retain its position as king of the heap.
Netflix showed a lot of vulnerability in 2022, with its share price dropping to below $200. Growth slowed and it appeared that other streaming services were finally starting to catch up and possibility surpass NFLX.
But then Netflix made what I think was a bold, and inspired business decision. It decided to toss away its longtime wink and nod to account sharing and instead charge a fee to any account holder who had someone outside of their household log in.
Rather than facing a backlash from the public, Netflix saw a massive windfall from the move for one reason — because people saw value in the product, and they didn’t want to give it up. In the first quarter after the change, Netflix saw an increase of 8.8 million paid subscribers.
For the first quarter, NFLX saw revenue up 15% from a year ago to $9.37 billion. And it forecast Q2 revenue of $9.49 billion, which would be a nearly 16% increase from last year.
NFLX is hitting on all cylinders. Again. The stock is up 14% this year and gets an “A” rating in the Portfolio Grader.
PDD Holdings (PPD)
PPD Holdings (NASDAQ:PPD) is the parent company of the Chinese e-commerce company Pinduoduo, which specializes in serving China’s mom-and-pop agricultural industry.
Pinduoduo makes it possible for small-scale farmers to sell their fruits and vegetables directly to consumers.
But it doesn’t stop there. PPD Holdings is expanding into Western markets via its Temu app, which provides Chinese goods that are sharply discounted. Temu is among the most downloaded apps in the U.S., German, the U.K., France, Canada and Italy.
In the U.S., Temu is the No. two shopping app, with monthly users increasing by 950% on a year-over-year basis in the last quarter of 2023.
Earnings in the fourth quarter included revenue of $12.5 billion, up 123% from a year ago. PDD brought in a profit of $3.1 billion and an increase of 146% from the fourth quarter of 2022.
However, there’s some risk involved with PDD. Increased tensions between the U.S. and Beijing increase the likelihood that companies like PDD could face additional restrictions from Washington. That’s one reason why PDD stock is down 12% so far in 2024, despite its earnings growth and potential.
PDD stock has an “A” rating in the Portfolio Grader. But investing in this stock means paying attention to global politics.
International Business Machines (IBM)
The inclusion of International Business Machines (NYSE:IBM) proves that you can find exciting A-rated tech stocks even among the oldest and most established tech companies on the planet.
IBM traces its history back for generations and punch-card based data processing machines in the 1880s. IBM was responsible for the first electronic computer, launched in 1943, and the first personal computer in 1981.
Today, it’s simply one of the biggest cloud infrastructure providers in the world. Its Watson AI engine and Watsonx generative AI platform have the potential to power IBM through the decade by partnering with enterprise customers.
Earnings for the first quarter of 2024 included revenue of $14.5 billion, up 1% from a year ago. Net income of $1.6 billion was a massive 69% increase from last year, and earnings per share of $1.69 was up 66% from the first quarter of 2023.
IBM issued guidance for full-year revenue growth in the mid- single digits, and expects to generate roughly $12 billion in free cash flow for the year.
IBM stock is up 12% in 2024 and gets an “A” rating in the Portfolio Grader.
Spotify Technology (SPOT)
If you love music, you probably know all about Spotify Technology (NYSE:SPOT). Spotify is a digital music, podcast and video service that provides countless tunes and audio files from hundreds of artists.
There are a few ways to make money. It sells advertisements that are targeted to its massive base of 388 million monthly active users. And it also has a premium ad-free subscription service that has 239 million monthly active users.
Both levels of users are growing rapidly. Spotify says the number monthly active users using Spotify for free increased 22% in the first quarter from a year ago, while paid premium memberships increased by 14% from a year ago.
And that means much greater profits for SPOT stock. Spotify reported revenue of $3.6 billion in the quarter, up 20% from a year ago. Profits of $1 billion were up 31% from the first quarter of 2023.
That’s music to any investor’s ears. SPOT stock is up 50% this year and gets an “A” rating in the Portfolio Grader.
CrowdStrike Holdings (CRWD)
As technology becomes more critical, more of our personal information and finances are online. Cloud computing makes it possible to tap into business networks at home, in the office or through a mobile device, but there are always bad actors who are looking to do damage by breaking into a network to steal or cause mayhem.
So my top pick for cybersecurity stock is CrowdStrike Holdings (NASDAQ:CRWD). Its endpoint security solutions include its Falcon platform, which secures entry points on servers, smartphones and laptops.
The company offers 27 cloud modules on its Falcon platform on a software-as-a-service (SaaS) model, including corporate endpoint security, IT operations, cloud security, data protection, identity protection and cybersecurity generative AI.
Roughly 64% of CrowdStrike customers subscribe to at least five modules, giving CrowdStrike an impressive revenue stream. The company brought in $845.3 million in revenue in the fourth quarter, up 33% from a year ago.
CRWD stock should continue to perform as its customers base grows and its SaaS model flourishes. CrowdStrike is up 16% in 2024 and gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA, PLTR, SPOT and CRWD. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in NVDA and PLTR. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
