The technology sector is vast, comprising gadget makers, software developers, wireless providers, streaming services, semiconductor companies, and cloud computing providers, to name just a few.
Any company that sells a product or service heavily infused with technology likely belongs to the tech sector and it can come on the list of best tech stocks to buy.
Tech stocks have had a rough patch in recent years as treasury yields have spiked.
From 2021 to 2022 alone, the technology-heavy Nasdaq Composite, NASDAQ-100 Technology Sector Index (NDXT), has fallen by as much as 45%.
However, owing to the strong recovery this year, the general sentiment of the market is that tech companies will continue to power up this year, thanks to several emerging technologies.
Tech stocks offer you growth and with the rising digital economy, the opportunities are increasing.
The best tech stocks to invest in now come from companies that are building the future.
Whether they manufacture sleek mobile devices or develop digital services you can’t live without them. Fast-growing technology stocks can set portfolios into hyperdrive.
To help you take advantage of the massive opportunities in technology stocks, we’ve gathered the five best tech stocks to invest in now
The Technology Sector: An Overview
Before we dive into the exciting world of the best tech stocks to invest in now, let’s take a moment to get a bird’s-eye view of the technology sector, as a whole.
It’s no secret that technology is reshaping the way we live, work, and interact with the world around us.
From smartphones to artificial intelligence, the advancements in this sector have been nothing short of astounding.
One of the key factors that make the technology sector so appealing is its potential for exponential growth.
Technological innovation knows no bounds, and companies in this space have the ability to disrupt entire industries literally overnight.
Just think about how streaming services revolutionized the entertainment landscape, or how e-commerce giants changed the way we shop.
It’s this game-changing potential that attracts investors like bees to honey.
As an investor, it’s crucial to keep up with the latest trends, emerging technologies, and market dynamics.
While it’s impossible to predict the future with absolute certainty, expositing the best tech stocks to invest in now can offer substantial opportunities for those willing to embrace both the risks and rewards.
Technology Stocks to Buy Now
Now that we’ve laid the groundwork, let’s dig deeper into the exciting world of best tech stocks to invest in now and uncover some potential gems to consider for your investment portfolio.
So read on ahead if you’re curious about what are best tech stocks to buy, because we have curated a wonderful list below:
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Palo Alto Networks (PANW)
Palo Alto Networks (PANW) is a cybersecurity specialist, and a worthy contender in our list of best tech stocks to invest in now.
It’s about a $40 billion company and a lot of people have heard of them. Annual sales are in that $5 billion range. PANW is a good tech stock to keep on your radar.
The company has been expanding its portfolio over the last few years and launching a lot of new products. Palo Alto covers some major areas including network security and cloud security.
Digital security has become a crucial area over the last few years as so much more businesses shifted online.
Palo Alto Networks has got a lot of good things in terms of user engagement and growing portfolio. That opens different avenues for growth.
The company has over 900 paying customers right now with contracts that are over one million and 43 clients that are over that 10 million mark. Both those numbers are rising swiftly.
In December 2021, PANW announced that it has joined the Nasdaq-100 Index.
The index consists of the top 100 largest domestic and international non-financial companies on the Nasdaq exchange.
Following this news, the company announced the appointment of Helmut Reisinger to the position of CEO for Europe, the Middle East and Africa, and Latin America.
With things shaping up in the online space in such a robust manner, Palo Alto Networks is on the right path for growth.
Citigroup has rated PANW stock as a buy with a price target of $585, making it to be in the list of best emerging stocks.
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Intuit Inc. (INTU)
Intuit Inc. (INTU) offers its mission-critical software to clients for free and is among the best emerging stocks to keep an eye on.
The company serves business and financial management products to small and self-employed businesses.
Known for its famous software that includes QuickBooks online, desktop software TurboTax, and Mint products for consumers.
INTU stock has become a SaaS heavyweight in recent years and a favorite among retail investors.
The company acquired Mailchimp email marketing software for $12bn late last year. This should help massively grow its target market.
Despite a recent correction in the tech industry, INTU stock has still risen nearly 40% over the past year.
Recently, Intuit announced Bill Negotiation in Mint. For those unaware, Mint is a personal financial management website and mobile app for the U.S. and Canada.
In collaboration with ApexEdge’s Billshark, Mint suggests areas where users can save on monthly payments. Moreover, it associates them with Billshark to negotiate rates on their behalf.
With almost everything being on subscription now, it is difficult to keep track of payments and changing rates.
Therefore, this service would benefit many consumers who are overpaying on monthly payments and subscriptions.
INTU is also not resting on its laurels. QuickBooks has also announced two new products that provide small businesses and their employees with faster access to their money.
It would give them greater cash flow flexibility that allows them to build on their business momentum for success.
Intuit is a profitable company and its stocks are one of the best tech stocks to invest in now. Goldman has a buy rating for INTU stock with a price target of $840.
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Oracle Corporation (ORCL)
Oracle Corporation (ORCL) is a tech giant that specializes in enterprise information technology. For the most part, the company’s businesses include cloud and license, hardware, and services.
Oracle’s technologies enable clients to build, manage, and support their internal and external products and services.
Investors will be hoping for strength from Oracle as it approaches its next earnings release. It is expected that Oracle will post earnings of $1.17 per share.
This would mark year-over-year growth of 0.86%. Meanwhile, the latest consensus estimate is calling for revenue of $10.51 billion, which is up 4.21% from the prior-year quarter.
In the previous quarter, Oracle reported total revenue of over $10.3 billion, a year-over-year increase of 5.7%.
However, despite the small increases, the company’s stock still managed to grow by over 40% last year.
In December 2021, Oracle made waves in the healthcare IT world when it announced its plans to acquire Cerner.
Cerner is a healthcare company that is a supplier of health information technology services, devices, and hardware. Oracle is to acquire Cerner for about $28.3 billion in equity value.
This acquisition will provide Oracle with heaps of health data to train and improve its artificial intelligence-based cloud services.
Ultimately, this would help boost the company’s footprint in the health care sector.
Oracle is a profitable company with a lot of upsides. ORCL is clearly among the best tech stocks to invest in now, heading forward.
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JFrog Ltd. (FROG)
JFrog (FROG) provides a DevOps platform to achieve a continuous software release management platform.
FROG has built a platform that manages the development and monitoring of software, whether it’s in an on-premise or cloud environment.
JFrog’s go-to-market strategy has traditionally been organic, relying on adoption from developers.
It has delivered growth this way, but it did make it difficult to land larger enterprise deals.
However, the company has bolstered its direct sales force, in part helped by the influx of funds from its 2020 IPO.
JFrog ramped up spending on sales and marketing to $24.3 million in the latest quarter. That’s up from $14.8 million in the year-ago quarter.
During this period, the number of customers with annual recurring revenues greater than $100,000 spiked by 49% to 466.
FROG stock looks good based on its quarterly performances and its upcoming fourth-quarter results. The company is expected to post strong outcomes following a healthy third quarter.
Jfrog would expect to post revenue between $57.5 million and $58.5 million. That would be an increase of more than 50% from the same period in 2020.
Stifel has rated FROG as a buy with a price target of $45.
Stifel analysts believe the company is well-positioned to sustain 30%-plus revenue growth in coming years which will make it one of the best technology stocks to buy now.
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Confluent Inc. (CFLT)
Confluent (CFLT) is a software company, and another great pick in our list of best tech stocks to invest in now.
It offers a new category of data infrastructure designed to connect all the applications and systems of a company around a real-time central nervous system.
In simple words, it delivers clients a data-rich front-end customer experience.
Confluent has been making progress recently. In its latest quarter, the company reported a revenue of over $100 million. That was a year-over-year increase of 66%.
While the net income also increased by 30% year over year.
Late last year, Confluent announced a partnership with Alibaba Cloud. The partnership entails the availability of the Confluent Data Streaming Service on Alibaba Cloud’s platform.
Notably, this will allow customers in mainland China to have a modern data streaming platform. It will enable them to harness the flow of real-time data across entire organizations.
Confluent has pioneered a new category of data infrastructure for data in motion, with open-source technology Apache Kafka at the heart of it.
The Alibaba partnership will open ways for Confluent to a bigger Chinese market.
Moreover, CFLT has recently signed a strategic collaboration agreement with Amazon Web Services.
This is a five-year agreement, upon which both companies will help each other in accelerating their cloud adoption journey with real-time data.
CFLT is among the top technology stocks to buy now. It has a couple of strong catalysts that could push the stock in the near future.
30 Tech Stocks to Keep an Eye on
While the names explored above are all among the best tech stocks to invest in now, it is also worth mentioning some top contenders in the space. These are as follows:
- Apple (AAPL)
- Amazon (AMZN)
- Microsoft (MSFT)
- Alphabet (GOOG)
- Tesla (TSLA)
- Meta Platforms (META)
- NVIDIA (NVDA)
- PayPal (PYPL)
- Advanced Micro Devices (AMD)
- Salesforce (CRM)
- Intel (INTC)
- Adobe (ADBE)
- Oracle (ORCL)
- Cisco Systems (CSCO)
- Visa (V)
- Mastercard (MA)
- Block (SQ)
- Shopify (SHOP)
- Twilio (TWLO)
- Zoom Video Communications (ZM)
- Datadog (DDOG)
- Cloudflare (NET)
- Akamai Technologies (AKAM)
- Cadence Design Systems (CDNS)
- Synopsys (SNPS)
- Workday (WDAY)
- ServiceNow (NOW)
- SAP (SAP)
- Micron Technology (MU)
- Intuit (INTU)
Sub-Sectors of the Technology Industry
Now that we have answered the question of what are the best tech stocks to buy, let’s take a moment to explore the sub-sectors within the technology industry.
Understanding these segments will give investors valuable insights into the diverse landscape they are about to navigate.
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Software and Services
When you think of tech, software, and services are often the first things that come to mind.
This sub-sector focuses on creating, developing, and delivering software solutions to individuals, businesses, and even governments.
From productivity tools to customer relationship management software, this area is all about innovation and meeting the ever-evolving needs of clients.
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Hardware and Electronics
While software steals much of the limelight, hardware, and electronics play just as vital a role in the tech industry.
This sub-sector encompasses the manufacturing and distribution of physical tech devices like smartphones, laptops, wearables, and other consumer electronics.
Cutting-edge hardware is the backbone that enables software applications to run seamlessly and provide exceptional user experiences.
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Internet and E-commerce
The internet has revolutionized how we live, work, and shop. This sub-sector revolves around companies involved in internet services and e-commerce platforms.
Think of the giants that connect billions of people worldwide, facilitate online transactions, and enable digital experiences.
From social media platforms to online marketplaces, this segment thrives on the interconnectedness of our digital age.
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Semiconductor and Chip Manufacturing
Semiconductors and chips might seem like tiny, insignificant components, but they power the devices we rely on daily.
The tech surrounding semiconductors and integrated circuits is essentially the brains behind most of our technology.
As demands for faster, smaller, and more energy-efficient devices continue to grow, semiconductor companies play a pivotal role in driving technological progress.
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Telecommunications
Communication is the lifeblood of our interconnected world, and telecommunications companies keep us connected.
Without telecommunications, we could not conceive services providing voice calls, data, and video communication services.
From traditional landline operators to wireless carriers and internet service providers, telecommunications companies are at the forefront of enabling seamless communication across the globe.
Factors to Consider When Choosing Tech Stocks
When it comes to investing in the tech industry, it’s crucial to consider various factors before making a decision.
While we’ve already discussed some of the best tech stocks to invest in now, it’s essential to delve deeper and explore the key considerations that can help guide your investment strategy.
By evaluating these factors, you can make more informed decisions that align with your investment goals:
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Market Capitalization and Size
When it comes to investing, size matters. Larger companies offer stability, while smaller ones can bring higher growth potential.
Consider your risk tolerance and investment horizon when exploring companies of different sizes.
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Revenue and Earnings Growth
Look for consistent revenue growth, reflecting increasing demand and market share.
This is crucial to consider because figures offer an objective basis of appraisal.
Also, consider a company’s ability to convert revenue into sustainable profits, fueling further innovation and expansion.
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Competitive Landscape and Market Share
The tech sector is known for its immense sense of competition, The best players stand out or disrupt.
It is therefore crucial to assess a tech company’s market position and potential to challenge the status quo.
A unique product or service with a sustainable competitive advantage suggests long-term success.
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Innovation and R&D Efforts
Innovation is among the most vital metrics in the tech business. For this reason, one must look for companies committed to research and development.
Their ability to stay ahead of the competition signifies sustainable growth and market leadership.
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Financial Health and Stability
Before investing in tech stocks, it is important to evaluate cash flow, debt levels, and profitability.
A healthy balance sheet, ample cash reserves, and manageable debt contribute to stability and growth opportunities.
No matter how innovative a tech company is, if its finances aren’t in order, it is unlikely to survive.
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Regulatory and Legal Considerations
Tech investors must always stay informed about potential changes and legal issues.
Assess a company’s compliance track record and ability to adapt to safeguard your investment against regulations that may impact the tech industry.
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Analyst Recommendations and Investor Sentiment
Opinions count. Consider analyst recommendations and investor sentiment.
While they provide additional perspectives, rely on independent judgment and avoid sole reliance on them.
Best Practices for Investing in Tech Stocks
Investing in the dynamic and ever-evolving tech sector can be both exhilarating and challenging.
To maximize your chances of success, it’s crucial to adopt some best practices tailored specifically to the world of tech stocks.
Firstly, it’s essential to stay informed and up-to-date with the latest trends and developments in the tech industry.
This means actively researching groundbreaking achievements, reading industry reports, and keeping a close eye on technological advancements.
Secondly, diversification is key. While it’s tempting to go all in with what seems like the “best tech stocks to invest in now,” spreading your investments across different tech subsectors and companies can help mitigate risk and maximize potential returns.
Additionally, pay attention to a company’s competitive positioning and long-term growth potential.
Evaluate factors such as competitive position, innovation pipeline, and management team.
Lastly, always keep a long-term perspective when investing in tech stocks. Technological advancements often take time to yield significant returns.
Don’t chase short-term fads, but go after potential disruptors that could be the next Google within the next 10 years.
Research Tools for Evaluating Tech Stocks
When it comes to investing in the fast-paced world of technology, having the right research tools at your disposal can make all the difference.
While no tool can guarantee success, a combination of fundamental analysis techniques, technical indicators, financial statement analysis, stock screeners, and industry reports can provide valuable insights for identifying the best tech stocks to invest in now.
Let’s explore each of these tools in more detail:
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Fundamental Analysis Techniques
Understanding the fundamentals of a tech company is crucial for evaluating its long-term potential.
Dig into the company’s financial health, revenue growth, profit margins, and especially its competitive advantages, given the technological context.
Also seek out sustainable tech business models, strong management teams, and innovative products or services that have the potential to disrupt industries.
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Technical Analysis Indicators
In addition to fundamental analysis, technical indicators can help investors gauge short-term price trends and market sentiment.
Tools such as moving averages, momentum indicators, and Bollinger Bands can provide insights into a stock’s momentum, volatility, and potential buying or selling opportunities.
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Reading and Interpreting Financial Statements
Tech companies often have unique financial dynamics, so it’s essential to have a close look at their financial statements.
Diving into the balance sheet, income statement, and cash flow statement are always important in investment.
With tech companies, it is especially vital to seek out sustainable revenue streams, healthy profit margins, and strong cash reserves.
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Utilizing Stock Screeners and Data Platforms
Stock screeners and data platforms are valuable tools for filtering through vast amounts of stock data and identifying the best emerging tech stocks out there.
Screeners and platforms allow you to set specific criteria based on metrics like market capitalization, revenue growth, price-to-earnings (P/E) ratio, and others.
They essentially help narrow down the universe of tech stocks to a more manageable list for further analysis.
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Following Industry Reports and Analyst Recommendations
Staying informed about the latest trends and developments in the tech sector is crucial.
For this, you would need to keep an eye on industry reports and research from reputable sources to understand the broader landscape and potential opportunities.
Also, you must pay attention to analyst recommendations and target price forecasts, but always evaluate them critically and consider multiple sources before making investment decisions.
Frequently Asked Questions
How Do I Determine the Best Tech Stocks to Invest In?
When evaluating tech stocks, focus on companies with innovative products, strong financials, and a competitive edge in their respective sectors.
Analyze their revenue growth, market share, and future prospects to identify the best tech stocks.
What Are Some Potential Risks of Investing in The Technology Sector?
Risks of investing in tech stocks include rapid market changes, intense competition, technological obsolescence, regulatory challenges, cybersecurity threats, and dependency on global supply chains.
How Can I Stay Updated on The Latest News and Developments in The Tech Industry?
Stay updated on the tech industry by following reputable tech news websites, subscribing to industry-specific newsletters, attending tech conferences, and engaging with online communities and influential tech analysts.
