If you’re looking to take a new position in your portfolio in tech stocks, there’s no time like the present. In fact, perhaps you’re a little late to the game. But late is better than never when it comes to finding the top tech stocks to buy.
Tech stocks are driving the stock market and have done so for the last year. The growth of generative AI launched a revolution in tech stocks, as many companies are looking for new ways to incorporate AI in their platforms.
For tech stocks, there’s a lot more to consider than just AI. Tech stocks also represent companies that are involved in hardware, software, cybersecurity, renewable energy technology and communications.
These are companies that must be consistently innovating and growing to stay ahead of the curve. And that could lead to significant returns for investors.
Tech stocks are appealing because the companies they represent are deft at adapting and pivoting in response to market demands and technological advancements. While they can sometimes be volatile, top tech stocks trend higher over the long term, so it makes sense to take a new position in some top-rated names.
The Portfolio Grader is our guide in finding the best tech stocks to buy, based on their earnings performance, growth, analyst sentiment and momentum. If you don’t already have a stake in these names, this could be an ideal time to make an initial investment.
Nvidia (NVDA)
We’re closing in on the sixth month of the year, but nothing’s really changed with my enthusiasm for Nvidia (NASDAQ:NVDA).
The maker of highly advanced graphics processing units is perhaps the most gripping tech stock of the decade, with a market cap that’s now north of $2 trillion.
And even though NVDA stock pulled back a little bit in recent weeks, I see that as people taking their profits rather than doubting Nvidia’s potential. If anything NVDA stock will be gathering momentum for another move higher.
Earnings for the first quarter of fiscal 2025 came out after the closing bell on May 22 and once again blew away expectations. Revenue was $26 billion, up 18% from the fourth quarter of fiscal 2024 and up 262% from a year ago. Data center revenue was $22.6 billion, up 427% from a year ago.
Nvidia also declared a 10-for-1 stock split, effective June 7, that will make the stock even more enticing to retail investors.
NVDA stock is up 89% this year and gets an “A” rating in the Portfolio Grader.
Super Micro Computer (SMCI)
In many ways, Super Micro Computer (NASDAQ:SMCI) works hand-in-hand with Nvidia.
While Nvidia makes the powerful GPUs that are so popular these days, Supermicro handles the server architecture and custom bundling that is so essential to allow GPUs to work with each other to perform rapid calculations.
That’s why SMCI stock has been on such an impressive run, up more than 200% so far this year.
But SMCI is also on sale — incredibly, the stock is down 20% from its April highs as investors speculated SMCI has gone up too fast, too quickly.
That’s just shortsighted thinking. Supermicro earnings have tripled from a year ago and its earnings per share are up fourfold. And as Nvidia continues to roll out upgraded GPUs, Supermicro’s server architecture will continue to be in demand.
SCMI stock gets an “A” rating in the Portfolio Grader.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is looking a lot better today than it was in late 2022. That’s when META stock hit a low as engagement and monthly active viewers were on the decline.
Meta seemed to be more interested in the internet of the future — the metaverse — than the here and now.
Granted, being a forward-thinking company is important in the tech realm. But Meta was dumping billions into building out the metaverse and hemorrhaging stock price.
Fortunately, CEO Mark Zuckerberg declared that 2023 would be a year where Meta would focus on profits and what makes the company successful.
And it worked. META stock is up 91% in the last 12 months, and the company is capitalizing on AI to make advertising more effective.
It’s also creating some interested generative AI products that improve the user experience for its Facebook, Instagram, Threads and WhatsApp platforms.
Now Meta Platforms counts roughly half the global population — nearly 4 billion people — as active monthly users. And META stock is once again one of the best tech stocks to buy. It gets an “A” rating in the Portfolio Grader.
Trump Media & Technology Group (DJT)
I understand the skepticism that you may feel with this pick. But let’s make a couple of things clear. First, investing in Trump Media & Technology Group (NASDAQ:DJT) isn’t an endorsement of Donald Trump’s policies or actions, nor is it a bet that he will win the November election.
Second, it’s important to know that Trump Media is a highly speculative stock that is highly susceptible to the headlines of the day. It’s not a trade for everyone.
But if you ignore the drama that surrounds Trump Media, you’ll see that this is a trade about possibilities, not politics. X, the social media platform formerly known as Twitter and now held privately by Elon Musk, is not the powerhouse that it used to be.
There is a real opportunity for an alternative to step forward — which is what Meta Platforms did with its Threads platform.
Right now, Trump Media isn’t even close to making money. It will take a long time for it to scale and generate a profit.
But it may be worth a small, speculative investment today. The stock continues to have a lot of momentum behind it, which is why it still gets an “A” in the Portfolio Grader.
Dell Technologies (DELL)
Dell Technologies (NYSE:DELL) is pretty much the polar opposite of Trump Media, which goes to prove that top-rated tech stocks to buy come in all shapes and sizes.
While Trump Media is a startup, Dell is a legacy hardware company that makes desktop computers, laptops and mobile devices.
But Dell isn’t acting like a legacy computer company. It’s one of the hottest tech stocks in the market today, with gains of 91% so far in 2024. Investors are jumping all over DELL stock because of the company’s large server business and the potential for companies to upgrade their servers to run AI applications.
Dell recorded fourth-quarter revenue of $22.3 billion, down 11% from a year ago. But net income of $1.15 billion was an increase of 91% from last year, and earnings per share of $1.59 was a big improvement from EPS of 84 cents in the fourth quarter of 2022.
DELL stock is worth taking a position. It gets an “A” rating in the Portfolio Grader.
International Business Machines (IBM)
Another legacy computing company that’s acting more like a young pup than a grizzled hound is International Business Machines (NYSE:IBM).
Like Dell, IBM is leaning heavily into AI to help power its profits. The company operates its watsonx generative AI platform and has booked more than $1 billion in business related to generative AI. Its software revenue was up 6% in the first quarter of 2024, and overall revenue was up 3%.
IBM is also working on some new AI assistants that are scheduled to be available later this year, and it has partnerships with some of the biggest companies in the world to make watsonx widely accessible.
And if you’re an income investor, you have to appreciate IBM’s dividend yield of nearly 4%.
IBM stock is up 5% in 2024 and is recovering nicely from a pullback in April. It gets an “A” rating in the Portfolio Grader.
Coinbase Global (COIN)
Of the technology stocks on this list, Coinbase Global (NASDAQ:COIN) is the only that can be classified as a fintech stock.
Coinbase operates a cryptocurrency trading platform that makes nearly 250 different types of assets available for buying, selling or trading.
And even if you aren’t interested in investing in cryptocurrency yourself, buying COIN stock allows you to monetize the growth of digital currency and the evolution of blockchain technology.
Revenue in the first quarter was $1.58 billion, up from $736 million a year ago. The company also turned a profit of $1.17 billion after losing $79 million in the first quarter of 2023.
The company managed to top expectations by boasting $511 million in subscription and services revenue, after forecasting a range between $410 million and $480 million.
COIN stock is up 31% this year and gets an “A” rating in the Portfolio Grader.
— Louis Navellier and the Investor Place Research Staff
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Source: Investor Place