Stocks to buy

7 Tech Stocks for Getting Rich in 2023

The year started on a cautious note for equities. However, the S&P 500 index has gained momentum as macroeconomic worries wane. Several sectors have made a strong comeback in the first two quarters. Among these, the technology sector is worth mentioning. Blue-chip tech stocks have surged higher as investors focus on areas of machine learning, AI, cloud computing, and data centers, among others. Even after a meaningful rally, there are several attractive tech stocks to buy.

This column does not focus on the big blue-chip names that are usually in the limelight. Instead, the focus is on tech stocks that represent companies delivering healthy growth. Further, these companies are in business segments that have a wide addressable market. Robust growth is, therefore, likely to sustain along with an upside in cash flows.

Let’s discuss the reasons to be bullish on these tech stocks to buy and hold.

Amdocs (DOX)

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Amdocs (NASDAQ:DOX) is an attractive name among high-growth tech stocks to buy. At a forward price-to-earnings ratio of 16.3 times, DOX stock is undervalued. Further, the stock provides a dividend yield of 1.81%, and I believe that dividend growth is likely to be robust.

As an overview, Amdocs is a provider of software services and solutions to the media and communications industry globally. For Q2 2023, the company reported revenue of $1.22 billion and a record 12-month backlog of $4.11 billion. Further, the company has reiterated its guidance of $700 million in free cash flow for the year.

It’s also worth noting that with strong cash flows and a liquidity buffer of $1.4 billion, Amdocs is positioned to accelerate growth. The company has already invested in its next-generation cloud platform. Additionally, Amdocs recently acquired the service assurance business of TEOCO for a consideration of $90 million. As growth accelerates, DOX stock is likely to trend higher.

CrowdStrike Holdings (CRWD)

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CrowdStrike Holdings (NASDAQ:CRWD) stock has trended higher by 52% year-to-date. However, the stock is still lower by 12% on a 12-month return basis. I believe that CRWD stock is worth accumulating on declines for a sustained rally.

CrowdStrike is a provider of security solutions that includes corporate endpoint security, cloud security, managed security services, security, and IT operations. The company also claims to be at the forefront of AI-driven innovation in cybersecurity.

As of 2023, CrowdStrike reported 23,019 customers, which was higher by 41% YTD. With a potential addressable market of $158 billion by 2026, there is ample headroom for client base expansion.

It’s worth noting that for Q1 2024, CrowdStrike reported revenue of $692.6 million. Further, 94% of the revenue was subscription based. For the quarter, the company’s operating margin improved to 17%. With accelerating recurring revenue and operating leverage, the company has clear cash flow visibility.

UiPath (PATH)

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UiPath (NYSE:PATH) stock is another attractive name to consider among tech stocks to buy. Amidst the volatility, PATH stock has remained sideways over a 12-month period. I believe that the positive momentum is sustainable for this AI tech stock.

UiPath is in the business of automation. The company provides an end-to-end platform for the automation of business processes. In terms of positives, UiPath reported revenue of $289.6 million for Q1 2024. Further, the dollar-based net retention rate was robust at 122%.

Further, GAAP operating loss narrowed to $46.4 million as compared to $116 million in losses for Q1 2023. With improving margins, the company is positioned to deliver healthy cash flows in the next few years. I also like the fact that the company invested 26% of its revenue in research and development in Q1 2024. An innovation-driven edge is likely to ensure that recurring revenue growth remains robust.

Splunk (SPLK)

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Splunk (NASDAQ:SPLK) stock is another interesting name that’s worth considering at current levels. Considering the growth potential in the cloud services business, a forward price-earnings ratio of 36x is attractive.

To put things into perspective, Splunk reported total revenue of $752 million for Q1 2024. Importantly, the company’s cloud revenue increased by 30% on a year-on-year basis to $419 million.

Another big positive was the company’s free cash flow of $486 million. As FCF accelerates, Splunk will be positioned to pursue aggressive innovation-driven growth. Considering Q1 numbers, Splunk is likely to invest $1 billion towards research and development for the year.

It’s worth noting that Splunk’s security and observability segment has a total addressable market of $100 billion. This is a key reason to be bullish for the next five years. Given the market size, annual recurring revenue growth is likely to be robust.


Source: Suslov

With a potentially big market for artificial intelligence in the coming decade, RELX (NYSE:RELX) stock is worth considering. At a forward P/E of 23.7x, the stock is trading at attractive valuations, and I expect a meaningful rally.

The company is a provider of information-based analytics and decision tools. With a presence in 180 countries, RELX has a wide addressable market and is positioned for sustained growth.

My point is underscored by the fact that RELX still derives 60% of its revenue from North America. There is ample scope for expansion in Europe and emerging economies. Further, the company’s key market segments include risk, legal, exhibitions, and scientific. All these sectors are poised for healthy growth.

I would like to point out that in 2022, RELX completed nine small acquisitions for a total consideration of 443 million pounds. This is likely to support revenue growth. I expect further consolidation in the AI business in the coming quarters.

Palantir Technologies (PLTR)

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After a deep correction last year, Palantir Technologies (NYSE:PLTR) stock has made a strong comeback. I expect the bullish momentum to be sustainable for PLTR stock, backed by positive business developments.

Further, with the company claiming to be a global leader in AI, the stock is definitely worth considering.

From a financial perspective, there are two important points to note. First, Palantir reported GAAP operating profit for the first time in Q1 2023. With operating leverage, I expect profitability to continue improving.

Furthermore, Palantir reported healthy revenue growth of 18% on a year-on-year basis to $525 million. As of Q1 2023, the company’s total customer count swelled by 41% on a year-on-year basis to 391. Robust customer addition across business segments will support revenue growth.

I must add that Palantir ended Q1 with a total liquidity buffer of $2.9 billion. With a zero-debt balance sheet, the company is well-positioned for aggressive investment in innovation and potential acquisitions.

Arista Networks (ANET)

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Arista Networks (NYSE:ANET) stock has surged higher by 68% in the last 12 months. I believe the cloud networking solutions provider remains attractive at a forward price-earnings ratio of 30x.

As an overview, the company is focused on software-driven, cognitive cloud networking. Arista has been on a high-growth trajectory. Through 2022, the company delivered a five-year revenue CAGR of 21.6%. With the company expecting the total addressable market to be worth $51 billion by 2027, healthy growth is likely to sustain.

Backed by sustained growth, the company has a strong balance sheet. As of March, Arista reported $3.4 billion in cash and equivalents. Further, the company is on track to deliver annual operating cash flow in the range of $1.4 to $1.6 billion.

Given the strong financial flexibility, I expect research and development expenses to continue increasing on a year-on-year basis. The company expects platform innovations to drive growth through 2027.

On the date of publication, Faisal Humayun 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 Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.