Top Tech Stocks to Buy and Hold for Long-Term Growth

3 Top Tech Stocks to Buy Right Now

In just five decades or so, technology has improved by leaps and bounds, shifting us from large mainframe computers in the 1970s to smartphones with internet connectivity in the 2020s. The good news is that these advancements still have a long way to go. Artificial intelligence (AI), digitalization, and cloud computing represent the future of how we work and communicate and businesses are jumping on these long-term trends. Investors who are looking for investment ideas should turn their attention to the technology sector, where many solid growth stocks can be found. A wide range of companies are benefiting from this digitalization shift and should see a sharp surge in demand for their products, services, and solutions. Owning such stocks over the long term means you get to ride this trend and enjoy attractive capital gains that can set you up for your retirement. Here are three stocks that you can buy to take advantage of this technological wave. Microsoft (NASDAQ: MSFT) is a technology behemoth with a market capitalization exceeding $3 trillion. The company sells and markets its Microsoft 365 suite of software applications and owns the business networking site LinkedIn. Despite its huge size, investors may be surprised to learn that the business is still demonstrating steady growth. From fiscal 2021 (the company has a June 30 fiscal year-end) to fiscal 2023, total revenue jumped from $168.1 billion to $211.9 billion. Net income increased from $61.3 billion to $72.4 billion over the same period. The software giant also generated an average free cash flow of around $60.2 billion over the three fiscal years. Microsoft's dividend history has also been stellar, with the company raising its quarterly dividend without fail since fiscal 2010. The most recent quarterly dividend stood at $0.75, up from $0.68 a year ago. The company's momentum has carried over the first nine months of fiscal 2025. Revenue rose nearly 16% year over year to $180.4 billion while operating income improved by almost 27% year over year to $81.5 billion. Net income stood at $66.1 billion for the nine-month period, up 26% year over year. Microsoft has carried on its tradition of generating copious amounts of free cash flow, with $50.7 billion churned out during the nine months, up 28% year over year. The Redmond-based company has conducted acquisitions and forged collaborations to continue growing its business. Back in 2019, Microsoft and OpenAI formed a partnership to build a supercomputing platform for the former's cloud service, Microsoft Azure. A few years later in 2022, Microsoft purchased Activision Blizzard for $68.7 billion to grow its gaming segment. More recently, the company invested $1.5 billion in G42, a UAE-based artificial intelligence company to enable the country to become a global AI hub. Microsoft also announced that it is working with ServiceNow, a digital workflow management company, to expand its strategic alliance and work on generative AI capabilities. Last month, the software giant forged an agreement with Japanese electronics company Hitachi to tap into generative AI to create innovative business solutions. These business development efforts should pave the way for Microsoft to continue expanding its presence and allow the company to increase its dominance in the technology world. Broadcom Broadcom (NASDAQ: AVGO) helps to design and develop a range of semiconductor, enterprise software, and security solutions. The company looks set to ride the surge in demand for AI, which should translate into more business for its range of solutions. Broadcom's financials are solid -- revenue grew from $27.5 billion for fiscal 2021 (ending October) to $35.8 billion for fiscal 2023. Net income did even better, more than doubling from $6.4 billion to $14.1 billion over the same period. The business also generated steadily higher free cash flow, going from $13.3 billion in fiscal 2021 to $17.6 billion in fiscal 2023. It paid an annual dividend of $1.84 per share, 12% higher than the $1.64 paid out a year ago. Broadcom continued to report higher revenue for the first half of fiscal 2024, but net income was impacted by higher research and development expenses and restructuring charges. Revenue for the first half of the year increased 38% year over year to $24.4 billion but net income fell by more than half to $3.4 billion. The company had completed its acquisition of VMWare, a company dealing with enterprise software, for around $61 billion back in November 2023 and the numbers reflect the consolidated results of both businesses. It declared a quarterly dividend of $0.525 per share, taking the annualized dividend to $2.10 per share for a 14% year-over-year increase. Management is confident about the future and has raised its guidance for fiscal 2024 revenue to come in at $51 billion, or close to 43% higher than that reported for fiscal 2023. With the proliferation of generative AI and the need for enterprise solutions and more complex semiconductors, Broadcom is well positioned to benefit in the coming years. Applied Materials Applied Materials (NASDAQ: AMAT) produces and supplies wafer fabrication equipment and software that is used to produce microchips for smartphones, televisions, and flat-panel displays. The company is poised to ride the trend for more complex semiconductor chips as it continuously delivers improvements in its equipment to enable more efficient computing. Applied Materials' financial numbers have been robust over the years and look set to continue improving as demand increases for its equipment. Revenue increased from $23.1 billion to $26.5 billion from fiscal 2021 (ended Oct. 31) to fiscal 2023. Net income climbed from $5.9 billion to $6.9 billion over the same period, and the business also generated positive free cash flow for all three years. Applied Materials has also been increasing its quarterly dividend at an impressive pace since fiscal 2017, with fiscal 2023 and 2024 seeing a 23% and 25% year-over-year increase to $0.32 and $0.40 per share, respectively. Applied Materials continued to post a strong set of earnings for the first half of fiscal 2024. Although revenue remained flat year over year at $13.3 billion, net income improved by 14% year over year to $3.7 billion. The company continues to churn out positive free cash flow for the first half of fiscal year 2024, and management issued strong guidance for its third quarter. The company expects revenue to come in at around $6.65 billion, above analysts' estimates of $6.58 billion. Adjusted net profit per share is projected to be in the range of between $1.83 and $2.19, at the higher end of analysts' estimates of $1.98. There could be more to come for the business as management sees catalysts that can drive the company's performance forward. The semiconductor device market grew 15% year over year in the first quarter of 2024 with cloud service providers announcing ambitious capital expenditure plans. The company has also announced its intention to double its manufacturing capacity, headcount, and research activities in Singapore in the coming years. Applied Materials also recently announced chip wiring innovations that entrench it firmly at the forefront of innovative research. The company will be the first to use ruthenium in high-volume production to enable more efficient production of the 2 nanometer chip, while its new enhanced dielectric material, Black Diamond, helps to strengthen chips for 3D stacking and is being adopted by leading logic and dynamic RAM chipmakers. With healthy sector tailwinds and its keen focus on research to improve its technological edge, Applied Materials is a stock that can deliver many more years of healthy growth. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $757,001!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Royston Yang has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Applied Materials and Microsoft. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Got $5,000? 2 Tech Stocks to Buy and Hold for the Long Term

The technology sector has helped lead the market higher not only this year but really for the past decade. This can be seen in the performance of an index such as the Dow Jones Technology Index, which is up over 27% year to date and has generated an average annual return of 20% over the past 10 years. As such, the tech sector is certainly not only for traders, but also for long-term buy and hold investors. Let's look at two tech stocks that investors can buy and hold for the long term. 1. Microsoft Once considered to be a stodgy, old-fashioned tech company, Microsoft (NASDAQ: MSFT) has repositioned itself to become one of the top tech companies leading the charge in artificial intelligence (AI). In fact, the company's ability to be able to reinvent itself over the years is one reason why it is a great stock to buy and hold. Microsoft's first big move showing its ability to adapt to the times was shifting from a one-time purchase model to a subscription model, with the introduction of Microsoft 365 starting back in 2013. The gradual nature with which the company did this proved to be a strong growth driver while not alienating its customer base. More recently, Microsoft has shown itself to be at the forefront of AI, making an early investment in OpenAI and then later substantially increasing that investment and partnering with the company to incorporate its technology throughout its various product offers. Thus far, the company's Azure cloud computing segment has been a big beneficiary of this early move, as customers clamored to build out their AI applications with the help of Azure. Given Azure's consumption-based model, where customers pay for what they need, this has led to strong growth for Azure and the business taking share from competitors. Microsoft has also shown a willingness to take big swings with acquisitions over the years, including with LinkedIn, GitHub, and Activision Blizzard. GitHub has been a strong performer for for the company, and it too has been a nice beneficiary of AI, with the introduction of GitHub AI assistant copilots to the developer platform helping drive 45% growth for the platform in the first quarter. Image source: Getty Images. While not currently on many investors' radars when looking at Microsoft, it will be interesting to see what the company does with AI when it comes to Xbox and Activision Blizzard when it releases its next video gaming console in a few years. There could be a lot of growth in store in a few years, given the potential advancement AI will have in gaming. Trading at a forward price-to-earnings ratio of under 33 times and a price/earnings-to-growth (PEG) ratio of under 0.9 times, the stock looks attractively priced, given its long-term growth potential and its monopoly-like dominance in the worker productivity (Word, Excel, etc.) and PC operating system (Windows) spaces. Similar to Microsoft, Alphabet (NASDAQ: GOOGL) has a monopoly-like dominant market position, but instead of worker productivity tools, it is winning with Google search, which has an estimated over 90%global marketshare. Like Microsoft, Alphabet's cloud computing segment is nicely benefiting from the AI boom. The similarities with Microsoft don't end there, as Alphabet has also made shrewd acquisitions. The best example of this is the company buying YouTube in 2006 for $1.65 billion. YouTube generated $8.1 billion in revenue just in the first quarter of 2024, so it's pretty safe to say it was a great acquisition. Alphabet is currently rumored to be close to acquiring Israeli cybersecurity company Wiz for around $23 billion. If consummated, the deal is expected to give Alphabet a needed security piece to help it win more cloud computing and AI deals. Meanwhile, Alphabet's core search business has a lot of potential to profit from AI. The company is already experimenting with AI overlays to answer some search-related questions, as well as with ways to monetize this new feature. While it has run into some early AI hiccups, AI overlays still open up a potential avenue to serve ads to the large percentage of search results where it does not provide them. Traditionally, the company only serves ad results to about 20% of its search queries and is only paid when these links are clicked. Trading at 23.5 times forward earnings and a PEG ratio of less than 0.8 times, Alphabet's stock is cheap. Given the potential growth in front of it and its dominant market position in search, the stock looks like a great technology stock to buy and hold for the long term. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $722,626!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Got $5,000? 2 Tech Stocks to Buy and Hold for the Long Term | The Motley Fool

Technology shares look poised to continue to lead the market higher over the long term. The technology sector has helped lead the market higher not only this year but really for the past decade. This can be seen in the performance of an index such as the Dow Jones Technology Index, which is up over 27% year to date and has generated an average annual return of 20% over the past 10 years. As such, the tech sector is certainly not only for traders, but also for long-term buy and hold investors. Let's look at two tech stocks that investors can buy and hold for the long term. Once considered to be a stodgy, old-fashioned tech company, Microsoft (MSFT 1.33%) has repositioned itself to become one of the top tech companies leading the charge in artificial intelligence (AI). In fact, the company's ability to be able to reinvent itself over the years is one reason why it is a great stock to buy and hold. Microsoft's first big move showing its ability to adapt to the times was shifting from a one-time purchase model to a subscription model, with the introduction of Microsoft 365 starting back in 2013. The gradual nature with which the company did this proved to be a strong growth driver while not alienating its customer base. More recently, Microsoft has shown itself to be at the forefront of AI, making an early investment in OpenAI and then later substantially increasing that investment and partnering with the company to incorporate its technology throughout its various product offers. Thus far, the company's Azure cloud computing segment has been a big beneficiary of this early move, as customers clamored to build out their AI applications with the help of Azure. Given Azure's consumption-based model, where customers pay for what they need, this has led to strong growth for Azure and the business taking share from competitors. Microsoft has also shown a willingness to take big swings with acquisitions over the years, including with LinkedIn, GitHub, and Activision Blizzard. GitHub has been a strong performer for for the company, and it too has been a nice beneficiary of AI, with the introduction of GitHub AI assistant copilots to the developer platform helping drive 45% growth for the platform in the first quarter. While not currently on many investors' radars when looking at Microsoft, it will be interesting to see what the company does with AI when it comes to Xbox and Activision Blizzard when it releases its next video gaming console in a few years. There could be a lot of growth in store in a few years, given the potential advancement AI will have in gaming. Trading at a forward price-to-earnings ratio of under 33 times and a price/earnings-to-growth (PEG) ratio of under 0.9 times, the stock looks attractively priced, given its long-term growth potential and its monopoly-like dominance in the worker productivity (Word, Excel, etc.) and PC operating system (Windows) spaces. Similar to Microsoft, Alphabet (GOOGL 2.26%) has a monopoly-like dominant market position, but instead of worker productivity tools, it is winning with Google search, which has an estimated over 90% global market share. Like Microsoft, Alphabet's cloud computing segment is nicely benefiting from the AI boom. The similarities with Microsoft don't end there, as Alphabet has also made shrewd acquisitions. The best example of this is the company buying YouTube in 2006 for $1.65 billion. YouTube generated $8.1 billion in revenue just in the first quarter of 2024, so it's pretty safe to say it was a great acquisition. Alphabet is currently rumored to be close to acquiring Israeli cybersecurity company Wiz for around $23 billion. If consummated, the deal is expected to give Alphabet a needed security piece to help it win more cloud computing and AI deals. Meanwhile, Alphabet's core search business has a lot of potential to profit from AI. The company is already experimenting with AI overlays to answer some search-related questions, as well as with ways to monetize this new feature. While it has run into some early AI hiccups, AI overlays still open up a potential avenue to serve ads to the large percentage of search results where it does not provide them. Traditionally, the company only serves ad results to about 20% of its search queries and is only paid when these links are clicked. Trading at 23.5 times forward earnings and a PEG ratio of less than 0.8 times, Alphabet's stock is cheap. Given the potential growth in front of it and its dominant market position in search, the stock looks like a great technology stock to buy and hold for the long term.

3 Top Tech Stocks to Buy Right Now | The Motley Fool

Here are three technology stocks that should definitely be on your buy list. In just five decades or so, technology has improved by leaps and bounds, shifting us from large mainframe computers in the 1970s to smartphones with internet connectivity in the 2020s. The good news is that these advancements still have a long way to go. Artificial intelligence (AI), digitalization, and cloud computing represent the future of how we work and communicate and businesses are jumping on these long-term trends. Investors who are looking for investment ideas should turn their attention to the technology sector, where many solid growth stocks can be found. A wide range of companies are benefiting from this digitalization shift and should see a sharp surge in demand for their products, services, and solutions. Owning such stocks over the long term means you get to ride this trend and enjoy attractive capital gains that can set you up for your retirement. Here are three stocks that you can buy to take advantage of this technological wave. Microsoft (MSFT 0.43%) is a technology behemoth with a market capitalization exceeding $3 trillion. The company sells and markets its Microsoft 365 suite of software applications and owns the business networking site LinkedIn. Despite its huge size, investors may be surprised to learn that the business is still demonstrating steady growth. From fiscal 2021 (the company has a June 30 fiscal year-end) to fiscal 2023, total revenue jumped from $168.1 billion to $211.9 billion. Net income increased from $61.3 billion to $72.4 billion over the same period. The software giant also generated an average free cash flow of around $60.2 billion over the three fiscal years. Microsoft's dividend history has also been stellar, with the company raising its quarterly dividend without fail since fiscal 2010. The most recent quarterly dividend stood at $0.75, up from $0.68 a year ago. The company's momentum has carried over the first nine months of fiscal 2025. Revenue rose nearly 16% year over year to $180.4 billion while operating income improved by almost 27% year over year to $81.5 billion. Net income stood at $66.1 billion for the nine-month period, up 26% year over year. Microsoft has carried on its tradition of generating copious amounts of free cash flow, with $50.7 billion churned out during the nine months, up 28% year over year. The Redmond-based company has conducted acquisitions and forged collaborations to continue growing its business. Back in 2019, Microsoft and OpenAI formed a partnership to build a supercomputing platform for the former's cloud service, Microsoft Azure. A few years later in 2022, Microsoft purchased Activision Blizzard for $68.7 billion to grow its gaming segment. More recently, the company invested $1.5 billion in G42, a UAE-based artificial intelligence company to enable the country to become a global AI hub. Microsoft also announced that it is working with ServiceNow, a digital workflow management company, to expand its strategic alliance and work on generative AI capabilities. Last month, the software giant forged an agreement with Japanese electronics company Hitachi to tap into generative AI to create innovative business solutions. These business development efforts should pave the way for Microsoft to continue expanding its presence and allow the company to increase its dominance in the technology world. Broadcom (AVGO 1.68%) helps to design and develop a range of semiconductor, enterprise software, and security solutions. The company looks set to ride the surge in demand for AI, which should translate into more business for its range of solutions. Broadcom's financials are solid -- revenue grew from $27.5 billion for fiscal 2021 (ending October) to $35.8 billion for fiscal 2023. Net income did even better, more than doubling from $6.4 billion to $14.1 billion over the same period. The business also generated steadily higher free cash flow, going from $13.3 billion in fiscal 2021 to $17.6 billion in fiscal 2023. It paid an annual dividend of $1.84 per share, 12% higher than the $1.64 paid out a year ago. Broadcom continued to report higher revenue for the first half of fiscal 2024, but net income was impacted by higher research and development expenses and restructuring charges. Revenue for the first half of the year increased 38% year over year to $24.4 billion but net income fell by more than half to $3.4 billion. The company had completed its acquisition of VMWare, a company dealing with enterprise software, for around $61 billion back in November 2023 and the numbers reflect the consolidated results of both businesses. It declared a quarterly dividend of $0.525 per share, taking the annualized dividend to $2.10 per share for a 14% year-over-year increase. Management is confident about the future and has raised its guidance for fiscal 2024 revenue to come in at $51 billion, or close to 43% higher than that reported for fiscal 2023. With the proliferation of generative AI and the need for enterprise solutions and more complex semiconductors, Broadcom is well positioned to benefit in the coming years. Applied Materials (AMAT -1.71%) produces and supplies wafer fabrication equipment and software that is used to produce microchips for smartphones, televisions, and flat-panel displays. The company is poised to ride the trend for more complex semiconductor chips as it continuously delivers improvements in its equipment to enable more efficient computing. Applied Materials' financial numbers have been robust over the years and look set to continue improving as demand increases for its equipment. Revenue increased from $23.1 billion to $26.5 billion from fiscal 2021 (ended Oct. 31) to fiscal 2023. Net income climbed from $5.9 billion to $6.9 billion over the same period, and the business also generated positive free cash flow for all three years. Applied Materials has also been increasing its quarterly dividend at an impressive pace since fiscal 2017, with fiscal 2023 and 2024 seeing a 23% and 25% year-over-year increase to $0.32 and $0.40 per share, respectively. Applied Materials continued to post a strong set of earnings for the first half of fiscal 2024. Although revenue remained flat year over year at $13.3 billion, net income improved by 14% year over year to $3.7 billion. The company continues to churn out positive free cash flow for the first half of fiscal year 2024, and management issued strong guidance for its third quarter. The company expects revenue to come in at around $6.65 billion, above analysts' estimates of $6.58 billion. Adjusted net profit per share is projected to be in the range of between $1.83 and $2.19, at the higher end of analysts' estimates of $1.98. There could be more to come for the business as management sees catalysts that can drive the company's performance forward. The semiconductor device market grew 15% year over year in the first quarter of 2024 with cloud service providers announcing ambitious capital expenditure plans. The company has also announced its intention to double its manufacturing capacity, headcount, and research activities in Singapore in the coming years. Applied Materials also recently announced chip wiring innovations that entrench it firmly at the forefront of innovative research. The company will be the first to use ruthenium in high-volume production to enable more efficient production of the 2 nanometer chip, while its new enhanced dielectric material, Black Diamond, helps to strengthen chips for 3D stacking and is being adopted by leading logic and dynamic RAM chipmakers. With healthy sector tailwinds and its keen focus on research to improve its technological edge, Applied Materials is a stock that can deliver many more years of healthy growth.