Tech stocks have had a great start to 2023 after the sell-off in 2022. With the growing demand and success of cloud computing, augmented reality and artificial intelligence, tech companies are ready for a solid comeback. The Nasdaq Composite Index was down 33% in 2022 and several stocks took a beating. Many companies suffered more than expected but things are looking better this year and now is a good time to start looking for the top tech stocks to buy.
With a soft inflation report and the economy slowly getting back to normal, it looks like tech stocks are set to gain. If you are thinking about investing in tech stocks right now, you will be able to take home big gains as they soar to new highs in 2023. With that in mind, let’s take a look at the three tech stocks to add to your portfolio.
I’ve said it before and I’ll say it again, Nvidia (NASDAQ:NVDA) is one company that can make you a millionaire. NVDA stock has been red hot since the beginning of 2023. Year-to-date (YTD) it has already generated a nearly 160% return. If you missed that opportunity its not too late, now is a good time to buy into one of the soaring tech stocks.
Nvidia reported a blowout first quarter report with top and bottom-line growth. Its revenue stood at $7.19 billion, up 19% from the previous quarter and EPS came in at $1.09. Its data center sales came in at $4.28 billion, a 14% annual increase. The data center sales are running at an annualized rate of $17 billion up to this quarter and management expects the data center numbers to grow throughout 2023.
Nvidia’s numbers show that the future is in artificial intelligence (AI) and its automotive division. That includes both chips and software for self-driving cars and grew by 114% year-over-year (YOY). With the growing AI chip demand, they expect a revenue boom in the coming quarters and this means there is a massive upside potential.
Nvidia has a bullish forecast and a massive demand for its product. The company stated that they are ramping up production to meet the growing demand. Nvidia is at the right place at the right time and it is in a position to make the most of the AI boom.
Microsoft (NASDAQ:MSFT) is one company that has always been on top of everything tech. It maintained that reputation with the hype surrounding AI and Microsoft’s investment in OpenAI’s ChatGPT. It is set to benefit significantly from this investment and has also unveiled several new AI-based search features for its search engine and internet browser. The best thing about Microsoft is that the management is ready to take on new challenges and adopt the latest technologies to its products. The investment in ChatGPT will give it an edge in the competitive industry and will also help improve the effectiveness of the core products by allowing task automation.
An already established, solid business, Microsoft reported better than expected quarterly results and the management expects that AI will drive future growth. MSFT stock is up 31% YTD. It has generated over 200% returns in the past five years and analysts expect the stock to hit $400 this year.
I believe Microsoft is a solid addition to your portfolio as it is set to benefit from the AI boom. Like Nvidia, the company is growing at a significant rate in the cloud business. Management expects this segment to increase by 15% to 16% YOY in the next quarter. When you invest in Microsoft, you are investing in an already established business and you do not have to worry about the company setting infrastructure or wait for the AI-driven demand to take off so that you can benefit from the stock. This also justifies the high stock price.
Ignore the temporary ups and downs and load up on MSFT stock. This is one to buy and hold for the decade as it will continue to soar.
One solid reason I’d bet on Apple (NASDAQ:AAPL) is its loyal customer base. No matter the market situation, Apple has remained a favorite. Many Mac and iPhone users are so loyal to the product that they wouldn’t switch to another brand for anything. Investors can turn to AAPL stock if the market is uncertain and you won’t be disappointed.
The tech giant enjoys a lofty valuation today and AAPL stock is up 37% YTD. This shows the solid business model and strength of its products and services. In the recent quarter, the company saw a 3% revenue decline YOY. It reported a revenue of $94.84 billion and enjoys a gross margin of 44%. Its iPhone revenue was the highest at $51.33 billion, followed by the services segment revenue at $20.91 billion. The iPhone revenue grew 2% in the quarter and the company expects the next quarter to be similar to this one.
The potential for Apple to expand is massive. It is working on a self-driving car and hasn’t even touched the foldable phone market. The business is great and the future looks stable. It is growing its services segment which means the company isn’t solely dependent on the iPhones.
AAPL stock is one of the tech stocks to buy before soaring as it inches closer to $200.
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.