In this article, we will take a look at the 13 best tech stocks for long term investment. To skip our analysis of the tech industry and its recent trends, you can go directly to see the 5 Best Tech Stocks For Long Term Investment.
Market experts and analysts alike have been baffled by the events of 2023. Just a year ago, there was widespread agreement that the Federal Reserve's efforts to combat inflation through interest rate hikes would trigger a recession in the United States. However, things have not unfolded as predicted, at least not so far. The unpredictable consequences of prolonged high-interest rates, the surge in artificial intelligence (AI), and escalating geopolitical tensions have resulted in significantly varied perspectives among forecasters. As an example, Deutsche Bank anticipates a substantial recession, while Goldman Sachs remains optimistic, foreseeing an economic resurgence propelled by a resilient job market.
As we approach the threshold of 2024, the landscape of the technology job market is experiencing a profound transformation driven by progress in AI, data analytics, and cybersecurity. Artificial Intelligence in particular stands out as potentially the most significant technological breakthrough in our lifetimes, drawing comparisons from Wall Street analysts to pivotal innovations such as the internet. Although there is widespread agreement that AI will eventually transform the economy and enhance corporate profits, there is intense debate about the timing and extent of these revolutionary and lucrative changes. Skeptics contend that, particularly in the stock market realm, the enthusiasm surrounding AI has outpaced actual developments, potentially leaving some highly valued stocks vulnerable to a decline should the economy experience a slowdown. With that said, the unyielding surge in tech stocks driven by AI, which commenced in 2023, seems to be displaying no signs of stopping. Of course, many analysts weren't entirely caught off-guard by this turbulence. For instance, in December 2022, Dan Ives from Wedbush had anticipated opportunities in the tech sector after the tumultuous events of the previous year. At that time, he asserted that tech stocks were poised for a 20% growth in 2023. In more recent statements, he suggests that those who hold a pessimistic view on AI risk missing out, emphasizing that "The bears try to look smart while the bulls make money."
On the other hand, the global semiconductor industry seems to be making a comeback as well. Given that computing is at the core of technology, the semiconductor sector stands out as one of the most crucial segments in the technology industry. While the semiconductor industry thrived in the aftermath of the coronavirus pandemic, inflation took its toll on the market in 2022, dampening demand for expensive processors, graphics cards, and laptops. This resulted in chip designers grappling with excess inventories in the pipeline, contributing to an overall slowdown as markets faltered. Signs suggest that the surplus may be resolving. Take, for example, Advanced Micro Devices, Inc. (NASDAQ:AMD)'s recent financial results, revealing a 43% annual increase in sales for the company's latest Ryzen 7000 series—a positive indication that consumers are finally beginning to spend again.
In general, the tech sector is positioned for growth as an increasing number of companies express intentions to participate in the race for AI and data analytics. Leading players such as Apple, Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA) are just a few among the many making significant advancements in the field and may well lead the way in capitalizing on the substantial opportunities presented by future advancements.
Best Tech Stocks for Long Term Investment
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Our Methodology
In curating our selection of the best tech stocks for long-term investment, we initially identified stocks exhibiting potential share price growth by considering analyst average share price targets with at least a Buy rating. Subsequently, we assessed the level of hedge fund investments in these stocks as of September 2023 using Insider Monkey's database, encompassing 910 hedge funds.
Palantir Technologies Inc. (NYSE:PLTR) is a software company specializing in the development of data fusion platforms, facilitating both machine-assisted and human-driven data analysis. The company's product platform includes Palantir Gotham, Palantir Apollo, and Palantir Foundry.
In the third quarter, Palantir Technologies Inc. (NYSE:PLTR) exceeded expectations, reporting an adjusted EPS of $0.07, surpassing estimates by $0.01. The revenue for the period grew by approximately 16.8% year over year, reaching $558 million, surpassing estimates by $2.08 million. Looking ahead to the fourth quarter, Palantir Technologies Inc. (NYSE:PLTR) projects revenue in the range of $599 million to $603 million, exceeding the consensus estimate of $599.26 million.
By the end of the third quarter of 2023, 31 hedge funds tracked by Insider Monkey held stakes in Palantir Technologies Inc. (NYSE:PLTR). The largest stakeholder was D E Shaw, possessing a $387.84 million stake in the company.
Much like Apple, Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA), Palantir Technologies Inc. (NYSE:PLTR) is one of the best tech stocks to buy for long-term investment.
The Trade Desk, Inc. (NASDAQ:TTD) is a multinational technology company headquartered in the United States, specializing in real-time programmatic marketing automation technologies, products, and services. The company is dedicated to personalizing digital content delivery to users and continues to advocate for Unified ID 2.0 (UID2), an industry-wide protocol designed to maintain relevant advertising while prioritizing user privacy.
In its Q3 2023 earnings report, The Trade Desk, Inc. (NASDAQ:TTD) revealed earnings per share of $0.33, surpassing the consensus analyst forecast of $0.29. Adjusted EBITDA experienced a notable 22.6% year-over-year growth, reaching $199.5 million, exceeding the prior guidance of $185 million. Revenues demonstrated a robust 25% year-over-year increase, totaling $493.27 million, surpassing analyst estimates of $486.91 million. Moreover, the company's customer retention remained consistently high, maintaining a level above 95% for the 10th consecutive quarter.
As of September 2023, among the 910 hedge funds surveyed by Insider Monkey, 39 had acquired shares of the company. The largest hedge fund investor is Ken Griffin’s Citadel Investment Group, holding a significant $250.6 million stake in The Trade Desk, Inc. (NASDAQ:TTD).
ClearBridge Mid Cap Growth Strategy made the following comment about The Trade Desk, Inc. (NASDAQ:TTD) in its Q2 2023 investor letter:
“We initiated a new position in The Trade Desk, Inc. (NASDAQ:TTD), the leading trading platform for advertisers to buy programmatic ad space, such as the banner ads on a website or the commercials played while streaming TV. Programmatic ads are secularly taking share from traditional forms of advertising, and much like financial trading platforms, The Trade Desk enjoys meaningful network effects that makes it the clear leader in the space. The stock sold off entering 2023 as investors worried over macro pressures on ad budgets, and we capitalized on this opportunity to buy a well-entrenched compounder in a large, growing market.”
Synopsys, Inc. (NASDAQ:SNPS) based in Sunnyvale, California, is an American company specializing in electronic design automation. The company's primary areas of focus include silicon design and verification, silicon intellectual property, as well as software security and quality. It provides tools and services to support the semiconductor design and manufacturing industry.
For the fourth quarter ending on Oct. 31, Synopsys, Inc. (NASDAQ:SNPS) reported adjusted earnings of $490.9 million, or $3.17 per share, marking a significant increase from $297.7 million, or $1.91 per share, in the corresponding quarter of the previous year. The company achieved a record quarterly revenue of $1.599 billion, reflecting a 25% growth. The company's electronic design automation division played a pivotal role in this revenue surge, generating $931.4 million, compared to $833.5 million in the same quarter the previous year. The design intellectual property business also exhibited robust performance at $513.7 million, showing an increase from $335.2 million in the preceding quarter and $295.2 million in the same period last year.
As of Q3 2023, Synopsys, Inc. (NASDAQ:SNPS) shares were owned by 57 hedge funds with a total value of $2.55 billion. Rajiv Jain's GQG Partners was the largest hedge fund shareholder with ownership of 1.1 million shares valued at $510.7 million.
In its Q3 2023 investor letter, Aristotle Atlantic Partners, LLC made the following comments about Synopsys, Inc. (NASDAQ:SNPS):
“Synopsys contributed to performance in the quarter as the company reported third quarter revenues that were above consensus, additionally the company raised fiscal year guidance for 2023. Synopsys continues to be a key beneficiary from the demand for semiconductors throughout the entire economy, as well as the increasing complexity of semiconductor design, particularly for silicon used in the artificial intelligence (AI) technology stack. The company is also leveraging AI for its design tools which can drive increased usage and improve margins for the company’s tools.”
Cadence Design Systems, Inc. (NASDAQ:CDNS), headquartered in San Jose, California, is a forefront player in electronic systems design. Leveraging its Intelligent System Design™ strategy, the company provides a comprehensive suite of computational software, hardware, and IP solutions. Its offerings encompass software, hardware, services, and reusable IC design blocks tailored to meet the diverse needs of its clientele.
On November 2, Cadence Design Systems, Inc. (NASDAQ:CDNS) unveiled the innovative Cadence® Voltus™ InsightAI, marking the industry's inaugural generative AI technology. This advancement is designed to identify the root cause of EM-IR drop violations at the early stages of the design process. Moreover, it selects and implements the most efficient fixes to enhance power, performance, and area (PPA).
As of Q3 2023, shares of Cadence Design Systems, Inc. (NASDAQ:CDNS) were owned by 58 prominent hedge funds, with a collective valuation of $2.94 billion. Andreas Halvorsen's Viking Global emerged as the leading hedge fund shareholder for the quarter.
Founded in 1999, Mercadolibre, Inc. (NASDAQ:MELI), headquartered in Buenos Aires, Argentina, is the preeminent e-commerce technology company in Latin America. Operating through its primary platforms, MercadoLibre.com and MercadoPago.com, the company provides solutions for individuals and businesses involved in online buying, selling, advertising, and payment transactions. On November 2, Wedbush analyst Scott Devitt reasserted an 'Outperform' rating for Mercadolibre, Inc. (NASDAQ:MELI) shares and maintained a price target of $1500.
As of Q3 2023, Mercadolibre, Inc. (NASDAQ:MELI) shares were held by 76 prominent hedge funds, totaling over $3.38 billion in value, according to data from Insider Monkey on 910 hedge funds. Generation Investment Management emerged as the largest hedge fund shareholder, possessing 480,480 shares valued at $609.19 million.
Headquartered in Austin, Texas, Tesla, Inc. (NASDAQ:TSLA) is a multinational American company specializing in automotive and clean energy. The company is renowned for its design and manufacturing of electric vehicles, as well as stationary battery energy storage solutions ranging from household to grid-scale. Additionally, Tesla produces solar panels, solar shingles, and related products and services.
In the third quarter of 2023, Tesla, Inc. (NASDAQ:TSLA) achieved the production of 430,488 vehicles and successfully delivered over 435,000 vehicles. The company operates six expansive manufacturing facilities globally, including its original plant in California and gigafactories located in Nevada, New York, Shanghai, Texas, and Berlin.
As per Insider Monkey's third-quarter database, 81 hedge funds exhibited a bullish stance on Tesla (NASDAQ:TSLA), indicating an increase from the 79 funds in the previous quarter. Catherine D. Wood's ARK Investment Management is a prominent shareholder for the quarter, with a stake valued at $1.02 billion.
Here’s what Baron Funds said about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2023 investor letter:
Many factors contributed to the strong performance of our largest Disruptive Growth position, Tesla, Inc. (NASDAQ:TSLA), in the period. Investors’ concerns regarding Tesla in 2022 continue to dissipate, and the company’s business has continued to grow materially, although at below peak margins. Tesla’s deliveries in China are recovering. The company’s newest factory in Texas has ramped production and should contribute to improved domestic sales and margins. U.S. government policies have lowered the cost to own Tesla vehicles, while also reducing the company’s battery production expenses.
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 107
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese semiconductor manufacturing company specializing in producing chips for entities like NVIDIA Corporation (NASDAQ:NVDA). The company delivered positive news to investors in November, reporting its first monthly increase in sales since February, driven by heightened demand for smartphones and AI.
On November 13, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) disclosed a notable 34.8% month-over-month surge in its October net revenue, reaching nearly NT$243.2 billion, with a year-over-year growth of 15.7%.
In the third quarter of 2023, 107 hedge funds had ownership of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Fisher Asset Management emerged as the primary investor in the company, augmenting its holdings to 30.637 million shares, valued at $2.66 billion.
Wedgewood Partners talked about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third quarter 2023 investor letter. Here is what it said:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance, as revenues declined 10% from a year ago. The Company is lapping revenue growth of over +40% (compared to 2022) during every quarter of 2023, so it is more instructive to look at the health of the business through the lens of a multi-year timeframe. Most of the Company’s customers have seen near-term weakness in demand due to pandemic normalization. However, we think the longer-term trend of more silicon per device is still very much intact, and the Company is well-positioned to serve this, given its commanding market share in leading edge capacity. The Company’s aggressive investment in leading-edge equipment combined with tight development with fabless IC designers, plus the embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”
Advanced Micro Devices, Inc. (NASDAQ:AMD), commonly known as AMD, is a multinational semiconductor company headquartered in Santa Clara, California. It specializes in the development of computer processors and related technologies, catering to both business and consumer markets.
Advanced Micro Devices, Inc. (NASDAQ:AMD) revealed on October 10 its execution of a definitive agreement to acquire Nod.ai, marking a strategic move to enhance the company's open AI software capabilities. Earlier in August of the same year, AMD had also acquired Mipsology, an AI software company recognized for its proficiency in providing AI software and solutions compatible with AMD adaptive computing silicon.
On November 13, investment advisory firm Roth MKM initiated coverage of Advanced Micro Devices, Inc. (NASDAQ:AMD) with a Buy rating and a price target of $125. The emphasis was placed on the company's distinctive portfolio of high-performance compute and networking processors.
As of Q3 2023, 110 hedge funds tracked by Insider Monkey held shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), worth $9.2 billion. Ken Fisher’s Fisher Asset Management is its largest hedge fund shareholder with ownership of 27.8 million shares valued at $2.9 billion.
In addition to Apple, Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD) ranks as one of the best tech stocks to buy for the long-term investment.
