After a difficult 2022, tech stocks are back this year in a big way. The tech-heavy Nasdaq composite is up 30% this year, far outpacing both the Dow Jones Industrial Average and the S&P 500. Tech stocks can be a great way to grow your portfolio, provided you know the top tech stocks to watch.
I like tech stocks because they typically have massive growth potential. By their very nature, tech companies are on the cutting edge of progress and are working to create new products. When successful, these innovations can drive tech stocks to new heights overnight.
Tech stocks are also heavily involved in some of the most popular and exciting spaces for investors–artificial intelligence, machine learning, cloud computing and e-commerce.
I’m using the Portfolio Grader to pinpoint some of the best tech stocks for 2023. These long-term tech investments are ideal to include in today’s portfolios.
Microsoft (NASDAQ:MSFT) is among the best tech stocks.
The company is a direct beneficiary of OpenAI’s ChatGPT chatbot that took Wall Street by storm this spring.
ChatGPT uses AI to generate human-like responses to questions and requests. And Microsoft is finally using the technology in its Bing search engine to get traction in search market share.
The technology is helping to push Microsoft stock up by 40% in 2023.
But this is only the beginning. Evercore ISI analyst Kirk Materne estimates AI could add $100 billion to Microsoft’s annual revenue by 2027.
Microsoft’s booming AI business is even overshadowing its troubles in closing its $69 billion acquisition of Activision Blizzard (NASDAQ:ATVI). The Federal Trade Commission is seeking to block the deal.
MSFT stock has a “B” rating in the Portfolio Grader.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) is also getting a boost from AI. The company provides data analytics, cybersecurity solutions and intelligence software but emphasizes its AI work to capitalize on public interest in the technology.
It also has a multi-year agreement with the Pentagon valued at up to $463 million that will use AI to help the military use real-time information in combat situations.
These innovations helped PLTR stock jump nearly 150% in 2023. It has a “B” rating in the Portfolio Grader.
While Microsoft may be hoping to use generative AI to boost its Bing search engine’s popularity and market share, the undisputed champion is Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and its Google search engine. Google owns about 86% of the search engine market share.
This year, Alphabet also unveiled its generative AI chatbot, Google Bard. While the launch was unfortunate. The company released a video in February showcasing the technology, but Bard flubbed an answer. Alphabet has been adjusting to better compete with OpenAI’s ChatGPT.
Advertising is the name of the game for Alphabet—it gets roughly 80% of its revenue from ads. So it’s notable that the global ad market is expected to grow from $550 billion last year to $800 billion in 2023.
GOOG stock has a “B” rating in the Portfolio Grader.
Applied Materials (AMAT)
California-based Applied Materials (NASDAQ:AMAT) partners with semiconductor manufacturers to help produce chips for high-end displays in computers, televisions, smartphones and solar products.
As the planet’s biggest semiconductor capital equipment producer, it plays a vital role in the tech space and will continue to grow as reliance on semiconductors increases.
Earnings for the second quarter include revenue of $6.63 billion and earnings per share of $2, which beat analysts’ expectations for $6.37 billion and $1.83 in EPS.
AMAT stock is up 44% in 2023 and has a “B” rating in the Portfolio Grader.
Perhaps no company is hotter right now than Nvidia. (NASDAQ:NVDA) The chip maker sparked renewed interest in AI stocks this year when it shockingly increased its revenue target for the second quarter from $7.2 billion to $11 billion because of demand for its chips from computing and generative AI end users.
Now Nvidia’s market cap is over $1 trillion, and the stock is up 180% since January 1.
Nivida is a leading provider of graphics processing units and accelerated processing systems. It posted an adjusted gross margin of 67% in the first quarter, but it expects that to increase to 70% in Q2.
Analysts have a consensus price target of $460, representing a 12% upside. NVDA stock has a “B” rating in the Portfolio Grader.
The maker of smartphones, computers, wearable devices and its ubiquitous App Store, Apple (NASDAQ:AAPL) is a money machine. Apple has a market capitalization of $2.8 trillion that seems to be growing by the day.
And there’s plenty of reason to believe the dollars will keep rolling in. Wedbush Securities analyst Dan Ives is projecting that Apple will do well from the next iPhone release, which is expected to be out in the third quarter.
Ives says that about 250 million iPhones are more than four years old and are prime candidates for an upgrade. The average iPhone price clocks in just under $1,000, so Apple can expect huge numbers.
But don’t forget the Services Division, which brought in a new high of $20.9 billion in revenue in the fiscal second quarter. The Services Division has better profit margins because of fewer research and development costs.
Apple recorded revenue of $94.8 billion and earnings per share of $1.52. And it’s taking care of its shareholders by announcing another $90 billion in share repurchases.
AAPL stock is up 40% this year and has a “B” rating in the Portfolio Grader.
Samsara (NYSE:IOT) is an excellent stock to buy to diversify your technology holdings. The company provides a hardware and software platform that helps businesses monitor their fleets.
The company provides tracking services, vehicle statistics, environmental monitoring and vehicle safety solutions. Samara’s products will help companies reduce their number of accidents and lower insurance rates.
The company uses AI to track vehicle and operator performance, including incidents of speeding, tailgating and other behaviors that could be seen as unsafe.
Earnings for the first quarter included revenue of $204.3 million, which was better than analysts’ consensus expectations of $192 million. The company projected Q2 earnings of between $206 million and $208 million, better than Wall Street’s expectations of $201 million.
IOT stock is up 146% in 2023, including a 59% spike in June as investors reacted positively to the company’s earnings and guidance. IOT has an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in MSFT, GOOG and NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in AAPL. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.