With technology giants driving major stock indexes to record highs, investors are looking for the best technology stocks to deliver high returns. The impact of technology giants on the U.S. economy is undeniable. According to a recent article in Fortune magazine, technology will continue to be a major driver of economic growth. The article argues that the invention and adoption of new technologies improves living standards while also increasing profits for the companies that provide these solutions.
The dominance of technology in nearly every aspect of life is reason enough to back the top companies in this field. While large technology companies have driven the economy's recent growth, a smaller set of companies has been driving economic growth. S&P to new highs. This bodes well for investors looking to add more tech diversity to their portfolios.
There are many different types of tech stocks, so for this story I'll focus on companies that are launching the most exciting new products and that I believe will ultimately lay the foundation for long-term returns.
Nvidia (NVDA)
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Once relatively unknown, NVIDIA (Nasdaq:NVDA) has rapidly risen through the tech ranks with its AI chips. The company recently hit a new milestone of a $3 trillion market cap after its stock price tripled since 2023. This comes as the company's technology is valued at tens of thousands of dollars, giving it a dominant position in the AI chip market.
Nvidia's latest price hike comes after the company announced the launch of its next-generation AI chip, codenamed “Blackwell,” which is expected to be more powerful than its predecessor, the H100. As demand for generative AI technology grows, Blackwell's sales will cement Nvidia's position as an AI leader. Nvidia's leather-jacketed CEO, Jensen Huang, has said the chip will generate big revenue this year.
I think NVDA's current stock price represents a great entry point into the market, and while critics may say the price is too high, I think the wide range of uses for the company's AI chips is a positive influence on valuation.
Nvidia's strong position in the AI market makes the company one of the best tech stocks to buy for big gains.
Hewlett Packard Enterprise (HPE)
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Hewlett-Packard (New York Stock Exchange:Hewlett-Packard) is one of the best tech stocks to buy right now thanks to its recent AI-driven performance. In its most recent earnings report, the PC giant reported revenue of $7.2 billion, up 3% from a year ago. One of the reasons for this strong performance is GreenLake, its technology-as-a-service platform, which saw revenue grow 39% to $15 billion.
The second reason investors are optimistic about the stock is the demand for the company's AI servers. The rapid development of AI technology is proving to be very lucrative for companies like HPE, which are powering their data centers with AI solutions. The company's CEO said that NVIDIA's new Tab AI-enabled chips currently take six to 12 weeks to process. The latest manufacturing schedule allows HPE to ship the backlog in the coming months. Analysts say that revenue from the sale of these chips will boost the company's net worth by $2 billion.
HPE's long-awaited AI enhancements make it a great time to invest in the stock, with some predicting the stock will rise to as much as $23.
CrowdStrike (CRWD)
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Another company growing amid growing demand for generative AI technology is Crowdstrike (Nasdaq:CRWD). The cybersecurity giant came out on top in its recent earnings report, reporting strong numbers for the first quarter. Revenues increased to $921 million from $693 million a year ago. CrowdStrike's impressive performance was driven by several factors, including subscription revenues, which accounted for most of the revenue growth. Subscription revenues increased 34% year over year to $872 million.
The second tailwind for the company is the power of its Unified Falcon platform. The technology is designed to power next-generation cybersecurity solutions with AI-generated tools. Its capabilities include workflow automation, lightning-fast data transfer, and incident innovation. In a recent earnings call, the company cited the platform's success, saying, “The platform enables CrowdStrike to solve the industry's biggest cybersecurity, IT, and data problems.”
In addition to the strong quarterly performance, the company also has a bright revenue outlook. Guidance for the next quarter is in the range of $958.3 million to $961.2 million, beating analysts' expectations of $954.4 million. CrowdStrike attributes the outlook to its differentiated cybersecurity platform, which could be a game-changer for companies in the AI era.
Crowdstrike has maintained a strong position with steady growth, making it one of the top tech stocks to buy in the market today.
As of the publication date of this article, Divya Premkumar did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are solely those of the author, which is subject to InvestorPlace.com copyright. Publication Guidelines.
