These stocks have seen double- and triple-digit gains over the past year.
Technology stocks are the driving force S&P500 Over the past year or so, the index has risen and broken out of bear territory, hitting record highs earlier this year, confirming that we are indeed in a bull market. This type of market favors growth stocks, so tech companies are likely to maintain momentum and rise in the coming months.
Some have already shown their strength recently and are progressing even further after achieving their best results last year. So just because a stock has risen double or even triple digits doesn't mean it's too late to buy that particular player. It is important to review a company's earnings history, future prospects, and market position. Investors can use these as a guide to determine whether the stock has what it takes to generate further profits. These days, companies are given extra points if they have a strong presence in the high-growth field of artificial intelligence (AI). (The AI market is expected to reach more than $1 trillion by the end of 2020.)
Check out these three super strong tech stocks that easily pass this test and you can buy without hesitation.
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1. Nvidia
Nvidia (NVDA 2.45%) The company's stock has soared more than 200% over the past year on optimism about its dominance in the AI chip market. The company holds about 80% market share, and its leadership is likely to last thanks to increased R&D spending and promises to continue releasing more powerful chips.
Just recently, Nvidia announced some long-awaited news. We plan to release a new Blackwell architecture later this year that includes six innovations.
These innovations include the world's most powerful chip and second-generation transformer engine, which enables Blackwell to support twice the computing power of previous generations. The Blackwell platform also enables users to run generative AI at 25x lower cost and energy consumption than previous platforms.
Nvidia's chip dominance has seen its revenues soar over the past few years, with triple-digit sales and net income increases in the most recent quarter. Considering this track record and the strengths mentioned above, the current stock price looks reasonable at 34 times forward earnings.
2. Meta
meta platform' (meta 3.21%) Shares have risen more than 130% in a year as the company emerges from a period of cost-cutting and ramps up investment in growth. And that growth includes a focus on AI, Meta's biggest investment area this year.
Meta is probably better known for its social media platforms than for its presence in the world of AI. The company owns his Facebook, Messenger, Instagram, and WhatsApp, and more than 3.1 billion people use at least one of these apps every day. Because of this brand strength, Meta has a solid moat, or competitive advantage, that keeps advertisers, its biggest source of revenue, coming back to reach users of these apps.
This has led to Meta's revenue and profit growth, and the technology company has recently reached new levels of strength and is confident it can continue to grow and reward investors. . There he began his first dividend.
Meta is fully committed to AI. Ultimately, users of the company's products and services will be able to take advantage of the AI tools there to enrich their experiences. Taking all of this into consideration, Meta is trading at a very cheap 25x forward earnings.
3. Amazon
Amazon (AMZN 2.82%) The stock has risen about 70% over the past year as the company has emerged from a difficult period and shown it has what it takes to win in the long term.
The e-commerce and cloud computing giant suffered from high inflation in 2022, but quickly turned things around by overhauling its cost structure. This should help Amazon gain an advantage in any environment. Amazon's sales rose by double digits last year and it was in the red in 2022, but it is now back in the black for the first time in nearly a decade.
Going forward, Amazon should benefit not only from its presence in AI, but also from its advantages in high-growth businesses such as e-commerce and cloud computing. Amazon leverages AI to improve its operations and reduce costs, and sells its AI products and services to customers through its Amazon Web Services (AWS) business. Both of these initiatives should lead to increased revenue in the short and long term.
That's why Amazon, which trades at 42 times forward earnings, doesn't look expensive right now. This is a stock I would buy without hesitation.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Adria Cimino has a position at her Amazon. The Motley Fool has positions in and recommends Amazon, MetaPlatform, and Nvidia. The Motley Fool has a disclosure policy.
