The tech industry is one of the most important growth drivers of our economy and it did suffer more than expected in 2022. However, with the market picking up the pace and companies reporting better-than-expected results, we can see the stock market gearing up for a wonderful rest of the year. Smart investors know that some companies have cemented themselves as cornerstones of the U.S. tech industry and investing in those long-term tech stocks will ensure consistent growth and dividends.
The tech companies we are talking about are the businesses that support other businesses. They bring products and services that are essential for individuals as well as business owners and this means they will continue generating revenue. It is important to focus on the long term and not expect an immediate impact. Investors who buy and hold often see impressive gains in the long run but the trick is to buy the right stocks to add to your portfolio.
If you are looking for solid tech stocks to buy and hold, here are the three top companies to buy for the long-term before they skyrocket.
If you had to invest in only one stock and hold it for the long-term, I’d recommend Microsoft (NASDAQ:MSFT). The company is a tech dinosaur that has evolved over the years and is a cloud computing leader today. It is pivoting to add artificial intelligence across its business and has invested in OpenAI, the company behind ChatGPT. Its total investment in OpenAI is $13 billion which will pay off further down the road. Microsoft is a company with solid financials and its recent quarterly report is proof that the company can do well, no matter the market conditions.
The company reported a 7% year-over-year revenue growth and hit $52.9 billion. Its profitability was even more robust with diluted EPS of $2.45 per share. Its Intelligent cloud segment was the highest revenue growth driver at 19% led by Azure Cloud which saw a whopping 31% growth. The earnings surge can add a record $151 billion to its market value. After the stellar results, Deutsche Bank raised the price target of the stock to $340 with a buy rating. Microsoft remains one of the best tech stocks to buy and hold in 2023.
The stock is up 23% year-to-date and has generated over 200% returns in the past five years. It hasn’t suffered as much as other stocks in the tech sell-off in 2022. My InvestorPlace colleague Larry Ramer believes that AI is taking the stock higher. If the market continues to improve, we could see MSFT stock gaining strength. The company also has a dividend yield of 0.92% and recently announced a quarterly dividend of $0.68 which makes the stock more attractive.
Next on the list is Apple (NASDAQ:AAPL). The tech giant has become a household name today due to its iPhones. One solid reason to bet on this company is its loyal customer base. It has been noticed that people who are using Apple will resist having to switch to another brand. That said, a lot of loyal customers are eagerly waiting for new models and latest services each year. The company’s steady growth in the services segment makes it a solid buy and hold. The stock is up 30% year to date and up 13% in the past six months.
This is one of the long-term tech stocks to buy and hold for the decade. No matter the market condition, Apple will continue growing strong. Stocks tend to perform better when the company reports profitability and nobody can beat Apple here. The company has a valuation of $2.65 trillion and it maintains a steady rise in revenue quarter after quarter. Fundamentally, Apple is a very stable company and one of the top blue-chip stocks to own. The company reports results on May 4 and buying AAPL stock before the earnings could help make significant gains.
Deutsche Bank has a price target of $170 for AAPL stock with a buy rating. Analysts expect the company to report results in line with estimates.
The list of top long-term tech stocks remains incomplete without the mention of Nvidia (NASDAQ:NVDA). A strong player in the tech space, Nvidia is here for the long term and it could be the biggest beneficiary of the AI revolution. Despite the massive tech sell off last year, NVDA stock is up 46% year-over-year. It is steadily gaining strength and inching closer to the 52-week high of $281. The stock is up 100% over the past six months. If you haven’t had the chance to buy NVDA stock, now isn’t too late.
Nvidia has a diversified business and it is already using AI across different segments. Plus, as AI technology continues to develop it will need Nvidia. The company’s chips are used to run AI applications and they do not come cheap, which means there is massive revenue opportunity for the company. It is also seeing impressive growth in the data center segment.
NVDA has a lot of potential to outperform the market and no matter how the market moves from here, the stock will stand strong. Recently, HSBC changed its stance on NVDA stock and at the time it was the only institution that had a negative rating on it. That said, the firm also doubled the price target of the stock to $355.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.