Technology stocks staged a spectacular comeback in 2023 driven by the hype surrounding artificial intelligence (AI) following the launch of Chat GPT, a chatbot that writes essays, code and composes music as if it was done by a human.
Shares in the tech sector were beaten down the year before as inflation soared to multi-decade highs and the Federal Reserve and its peers raised rates fast to slow the economy. The AI mania, however, has given a fresh impetus to the technology industry as a whole, from graphics chip makers to cloud platforms and cybersecurity firms, and the momentum just keeps going.
In this guide, we take a look at the hottest technology stocks to buy at the moment, based on their corporate background, earnings prospects and share price performance to help you make an informed investment decision.
Let’s start with a quick overview of the best tech stocks available in the stock market today: Let’s take an in-depth look at 10 of the best performing tech stocks to invest in right now: One of the “Magnificent Seven” tech firms that have led the AI-driven rally, Apple became the first ever company to surpass the $3 trillion market cap threshold. Its share price has retreated since touching a record in December 2023, though. Its brand value, product portfolio, and a loyal customer following work firmly in Apple’s favor. It also continues to monetize its active base of 2.2 billion devices by selling subscriptions, advertising, and payment services. These are part of the iPhone maker’s growing services business, which generated a record $23.9 billion in revenue in its fiscal second quarter. Overall revenue fell 4% year over year to $94.8 billion, and net income shrank 2.2% to $23.64 billion, or $1.53 per share, but still topping Wall Street expectations. Apple also pays a decent dividend, with a yield of 0.51%. It raised it this year by 4% to $0.25, and said it will buy back $110 billion of its shares. Thanks to devices such as the Apple Watch and the new Apple Vision Pro headset, it’s also one of the best wearable tech stocks. Yet, the best news is that the global smartphone market is recovering from a slump, which has concerned investors, and Apple overtook rival Samsung for global smartphone shipments in 2023, according to both IDC and Canalys.
Propeled by its push into AI technology with its $13 billion investment in Chat GPT developer Open AI, Microsoft has recently overtaken Apple as the most valuable company on Earth. Its shares have risen 63% in the past year. Although the Redmond, Washington-based tech giant is best known for its Windows operating system, CEO Satya Nadella said the company is now “applying AI at scale.” Microsoft is incorporating AI tools into all of its products and services, including its core Microsoft Office suite, such as Word, PowerPoint, and Excel, its Bing search engine and its Azure cloud computing business. Azure is the second-largest cloud provider, behind Amazon, accounting for about two-thirds of Microsoft’s revenue. It’s not all rivalry, though, as last fall Microsoft reportedly signed a $1 billion agreement with Amazon, under which the e-commerce giant pledged to spend that amount over five years on Microsoft 365 cloud-based productivity software licenses for its workforce. Microsoft’s revenue in the January to March quarter (its fiscal third) rose 17% year on year to $61.9 billion, with revenue from Azure and other cloud services rising 31% to $26.7 billion. Both were ahead of Wall Street expectations. Profit rose 20% from the same period a year earlier to $21.9 billion, or $2.94 per share.
The best-performing member of the Magnificent Seven, Nvidia’s market capitalization more than tripled over the past year and sailed past $2 trillion in February on expectation that mass AI adoption will fuel demand for its graphics processing units (GPUs), which power AI models. While many investors are wondering whether this pace of share price growth is sustainable, Nvidia’s earnings haven’t disappointed. Nvidia beat Wall Street’s earnings-per-share estimates in the past six quarters by large margins. Its earnings have been highly anticipated as a test of how much further the AI fuelled tech stock rally has to extend. In its fiscal first quarter ended April 28, Nvidia posted net income of $14.88 billion, or $5.98 per share, up 629% from $2.04 billion, or $0.82 per share a year earlier. Adjusted EPS was $6.12 versus $1.09 a year earlier. Revenue increased 262% to $26.04 billion in the quarter, driven by its data center and AI chips, beating Wall Street’s forecast of $24.59 billion. Defying skeptics, Nvidia expects demand for its products to continue to grow rapidly, as its revenue guidance for the subsequent quarter calls for 107% growth in revenue, to $28 billion. The latest set of blowout results and the new guidance drove Nvidia’s share price to a new high in May 2024, topping $1,000. The company said it will carry out a 10-for-1 stock split on June 7 and raised its dividend 150% to $0.01 per share on a post-split basis.
The world’s largest contract chipmaker, known as TSMC, with clients including Apple, Nvidia and Qualcomm, beat analyst estimates for earnings in the first quarter of 2024, driven by strong demand for AI chips. It returned to revenue and profit growth after four quarters of year-on-year declines. TSMC posted revenue of $18.87 billion, rising 16.5% from a year earlier, and EPS of $1.38 in the quarter, rising 12.9% year on year. It expects revenue of between $19.6 billion and $20.4 billion in the second quarter, 6% growth from the first quarter at the midpoint. The chipmaker expects revenue to expand more than 20% this year. With revenue expanding, the biggest risk for Taiwan-based TSMC remains geopolitical. According to BlackRock, US-China relations have a “high” risk rating, with Taiwan being the “biggest flashpoint.” To counter the escalating risk, TSMC is expanding abroad, including in Germany, where it agreed to build a $11 billion plant with as much as $5.3 billion of government subsidies. It plans to spend $40 billion to build two facilities in Arizona, and it’s building a $8.6 billion plant in Japan along with partners Sony Group and Denso.
The shares of the microprocessor and graphics semiconductor stock have gained more than 50% in the past year, driven by expectations that it will benefit from rising demand for AI chips (GPUs) used in large language models. Revenue in the first quarter rose 2% to $5.47 billion, beating analysts’ forecasts, while its EPS, adjusted for one-time items, was $0.62, slightly ahead of Wall Street predictions. Sales in the data center business, its largest segment, which includes its traditional server chips (CPUs) and AI chips, jumped more than 80% to a record $2.34 billion. The company boosted its 2024 full-year forecast for AI chip sales by $500 million to $4 billion. While Nvidia dominates that market with a roughly 80% market share, AMD said its newest Instinct AI chips will challenge Nvidia’s similar products for certain uses. In addition to releasing new processors, AMD last year also acquired AI software firm Mipsology, which will allow developers to use its GPUs to create AI models. With the AI market projected to expand at a compound annual growth rate of 37% through 2030, according to Grand View Research, AMD seems to have a lucrative future ahead. One of the first companies to adopt a software-as-a-service (SaaS) business model, Salesforce sells software products on a subscription plan and it dominates the market for customer relationship management software (CRM) with a roughly 30% share. It’s now infusing its software with AI capabilities and trimming costs to boost profit. While over the years, Salesforce bought several companies to expand its offerings, such as Tableau for analytics, Slack for collaboration, and MuleSoft for automating, last year it signaled that it won’t make any further large acquisitions. Instead, it revealed plans to integrate AI into its offerings like Slack and all its applications with the launch of its generative AI-enabled Einstein 1 platform and a conversational AI assistant. Amid a slowdown in sales growth and to improve future profitability, it refocused on cost cutting to improve operating margins. In its fiscal first quarter ended in January, revenue increased 11% to $9.13 billion, but it missed analyst expectations. Net income adjusted for one-time items was a better-than-expected $2.44 billion, or $2.44 per share, compared with $1.67 billion, or $1.69 per share, a year earlier. The company reiterated its revenue forecast of between $37.7 billion and $38 billion for its current fiscal year, which would be an increase of 8% to 9%. It forecast full-year adjusted EPS of between $9.86 and $9.94. In January 2024 the company said it would cut 700 more jobs to improve profitability. In February it said it “substantially completed” its workforce reduction. In February, the company began a quarterly dividend at $0.40 a share, and extended its share buybacks by $10 billion. With its shares up 84% in the past year, and a market capitalization of $104 billion, Palantir is a large-cap stock that specializes in cybersecurity products for both the private and public sectors. It leverages artificial intelligence and big data analytics to detect and prevent threats. Its AI-powered software can be used, for instance, to predict manufacturing downtime or identify money laundering and terrorist financing risks. In the public sector, Palantir Technologies has formed significant partnerships with the US military, helping it develop defense software and automate operational processes. It signed a $178 million contract with the US military earlier this year to help develop a field-deployable sensor station. However, in its recent earnings it was its US commercial customers that drove revenue growth due to demand for its AI platform. In the first quarter, total revenue increased 21% to $634.3 million from $525.2 million a year earlier. Its US commercial revenue was up 40% from a year earlier to $150 million, with its US commercial customer count increasing 69% to 262 customers. Adjusted EPS was $0.08 up from $0.05 a year earlier.
The stock price of Broadcom doubled in the past year, as the company extended its supply deal with Apple, which gives it some breathing space to pursue strategic acquisitions as it strengthens its foothold in the enterprise software market. The multi-billion dollar supply deal with Apple signed in 2023 is vital for its business, given that Apple represents 20% of its total sales. Founded in 1961 and headquartered in San Jose, California, the global technology company designs and sells semiconductors and infrastructure software. While Broadcom does not produce AI chips like Nvidia, many of its chips can support generative AI. For instance, its Jericho3-AI helps customers complete AI workloads at a faster pace, and Tomahawk 5 can speed up data transfer between AI endpoints. The chipmaker began acquiring enterprise software and cybersecurity companies in 2018, and it completed its latest acquisition, the $69 billion takeover of cloud software company VMware in November 2023. In 2018, it suffered a setback when its $142 billion bid for chipmaker Qualcomm was blocked due to national security concerns. Broadcom said the VMware takeover was transformational as it expects to hit revenue of $50 billion in 2024.
The shares of the subscription-based software-as-a-service (SaaS) provider have risen 30% in the past year, due to optimism about its new AI model it named Firefly. Adobe has recently announced several AI features and updates across its Creative Cloud applications, including Illustrator, Photoshop, Premiere Pro, Lightroom, After Effects, and Adobe Stock. The company posted revenue of $5.18 billion in the fiscal first quarter that ended March 1, which was up 11% from a year earlier, implying solid demand for cloud-based services, and earned $4.48 per share on an adjusted basis. The digital media unit, which includes its creative software suite, saw sales rise by 12% to $3.82 billion, while the unit that includes marketing and analytics software, increased sales by 10% to $1.29 billion. However, its forecasts for the second fiscal quarter were softer than analyst forecasts. Adobe expects revenue of between $5.25 billion and $5.30 billion and adjusted net income of up to $4.40 per share for the quarter, falling slightly short of Wall Street estimates. This indicates that the push into AI may take longer to lift revenue growth than anticipated.
One of the Magnificent Seven tech giants and with its share price up 178% in the past year, Meta dominates the social media landscape with its app family — Facebook, Instagram, and WhatsApp — collectively having 3.24 billion “daily active people,” according to Meta. The company makes most of its revenue from selling ads. This bodes well for Meta’s stock. According to Statista’s Market Insights, ad spending on social media is expected to grow from to $262 billion by 2028 from about $146 billion in 2023. After its costly bet on its virtual reality platform it called “the metaverse,” Meta is now positioning itself to be an AI leader. The company has been busy rolling out AI-powered tools to increase engagement on its apps and for advertisers to see better results. In September 2023, Meta introduced its new generation of Ray-Ban Meta smart glasses that allow users to livestream from the glasses to Facebook or Instagram and engage with Meta AI. Meta shares are currently trading at a forward P/E ratio of 21.43, based on 2025 forecasts. In the first quarter, the company had revenue of $36.46 billion, up 27% from a year earlier. Net income more than doubled to $12.37 billion, or $4.71 per share, from $5.71 billion, or $2.20 per share, a year earlier. Both revenue and EPS topped Wall Street expectations, however the company’s forecast for second quarter revenue at $36.5 billion lagged behind analyst forecasts. You can buy tech stocks through an online stock broker or brokerage app. There are many highly rated online stock brokers to choose from, including our #1-rated broker eToro. eToro stands out as the best stock trading platform to use in 2024 because it offers 0% commission trades on the world’s most popular stocks. It also offers zero-fee trading on thousands more stocks and ETFs, including tech ETFs like the Fidelity MSCI Information Technology Index ETF and the Global X Lithium and Battery Tech ETF. In addition to offering zero stock trading fees, eToro has a user-friendly trading platform with customizable technical charts. You can analyze tech stocks using dozens of built-in indicators or compare multiple stocks on a single chart. Regulated by leading bodies in the US, UK and Europe, eToro also supports copy trading. This allows you to set aside a portion of your portfolio to automatically mimic the trades of experienced tech investors. With copy trading, you can build a diversified tech stock portfolio in just a few clicks and you can get started with just $200. eToro has many more tools to help you succeed at investing in tech stocks. It offers detailed stock market news and analysis, plus it tracks trader sentiment so you can see which tech stocks they’re buying and selling. eToro also offer a free $100,000 demo account so you can try out investing in tech stocks completely risk-free. Pros Cons
Technology is vital for its impact on every part of the economy, increasing the speed, efficiency, and scale of work processes and transforming the world of entertainment. Tech stocks are the shares of companies involved in the technology sector. The tech sector involves companies engaged in the design, development, and support of computer operating systems and applications. It also includes companies that provide computer technology consulting services as well as those engaged in the manufacturing of computer equipment, data storage products, networking products, semiconductors, and components. Investors have long considered the tech sector to be one of the more exciting segments in the stock market, given that innovations in the tech field often have a visible impact on society. Technology, however, by its nature, evolves, which means new companies rise to the top while others fade away. For instance, once ruling the markets, Kodak saw its reign end with the advent of digital cameras and mobile phones. Now, much of the opportunity appears to be tied to artificial intelligence, machine-learning, cloud computing, data analytics, blockchain, and data security services. In recent months, significant attention has been given to advancements in generative AI applications, which are designed to develop original content by applying information the system “learns” from an existing database. This is said to have ushered in an AI era that will transform the economy and everyday life. The best performing tech stocks have all embraced this trend. With technology advancements new investment opportunities arise. However, investors must be mindful that the sector a fast-changing landscape and represents a high-growth, but high-risk area of investment. Tech companies, just like during the the early days of the internet, known as the “dot-com” era, can have a stratospheric rise, but also quickly disappear. To find out more about technology stock picks, we recommend checking out AltIndex, a subscription service that uses artificial intelligence (AI) and alternative data. This means that it analyzes social media and other websites, app downloads, customer satisfaction ratings, and other data to help people invest. The data AltIndex gathers over time is then compared to other companies while using machine learning to come up with investment insights. Stocks are given a score from of 1 to 100, simplifying the analytical process for investors. With more than 10k members, AltIndex is a widely used and trusted service. It provides over 100,000 unique daily stock insights and alerts, and has a very impressive win rate of 75% from its AI stock picks. To start your investing journey, you can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well many other useful features. Conclusion While tech stocks can be volatile, they are coveted by investors because of their high growth potential. Many tech companies, however, are new, operating with unproven business models and high capital needs. Their shares sometimes are driven by a popular trend, reaching valuations that are not in line with the stocks’s future potential. On this basis, the best tech stocks are the ones that have reasonable valuations, generate consistent profits, do reasonable well in an economic downturn, and provide investors with long-term growth.
Top 10 Tech Stocks to Invest in 2024
A Closer Look at the Top Tech Stocks to Buy
1. Apple (AAPL) – Best Tech Stock Overall With Popular Products
2. Microsoft (MSFT) – Cloud Challenger in the AI Revolution’s Driving Seat
3. Nvidia (NVDA) – The Top Beneficiary of Growing Demand for AI Tools
4. Taiwan Semiconductor (TSMC) – AI Chip Demand Lifts Sales and Profit
5. Advanced Micro Devices (AMD) – Nvidia Competitor Bets on AI Chips
6. Salesforce – Cost-Cutting Drive and Leveraging AI in CRM Tools
7. Palantir Technologies – AI Cybersecurity Tools; US Military Contracts
8. Broadcom – Apple Deal Protects Revenue; Focus on Acquisitions
9. Adobe – Creative Cloud Software Giant Releasing New AI Tools
10. Meta Platforms – Social Media Giant Focused on Virtual Reality
Where to Buy Tech Stocks
Understanding Tech Stocks
Where to Get Tips and Insights on Technology Stocks
References
FAQs
What are the top 10 tech stocks to buy?
What are good tech stocks to buy right now?
Is Amazon still a good stock to buy?
What are the hottest tech stocks?
