Last year turned out to be a rewarding one for numerous tech stocks, many of which bounced back from their struggles in 2022. The tech-heavy Nasdaq Composite surged by 43% over the year, outperforming the S&P 500 and Dow Jones.
While tech stocks enjoyed substantial success in 2023, a select few stocks are still worthy of investors’ attention. Here are three tech stocks that should be solid long-term additions to investors’ portfolios.
Taiwan Semiconductor Manufacturing Company
Taiwan Semiconductor Manufacturing (NYSE: TSM) – TSMC, the world’s largest semiconductor foundry, may not have the household recognition of other tech giants, but its role in the tech ecosystem is paramount and, I’d argue, overlooked. Its semiconductor chips are integral to a multitude of today’s electronic devices, from smartphones to car infotainment systems to GPUs, and are heavily relied upon by companies such as Apple, Tesla, and Nvidia.
While much of TSMC’s 2023 stock resurgence can be attributed to artificial intelligence (AI) hype, its chips’ usage in smartphones and high-performance computing still form the bulk of its revenue. With the anticipated rebound of the smartphone and PC markets, TSMC’s revenue growth is projected to get back on track.
Despite the presence of other major semiconductor companies, none can rival TSMC’s chipmaking expertise. It’s a company worthy of long-term investment confidence.
Microsoft
Microsoft (NASDAQ: MSFT) recently dethroned Apple as the world’s most valuable public company, boasting a market cap exceeding $2.9 trillion as of Jan. 18, 2024, after a 62% surge in 2023. Embracing diverse ventures spanning enterprise and consumer software, cloud computing, gaming, and AI, Microsoft stands as a leading player in numerous industries, which is reflected in its robust financial performance.
All three of Microsoft’s broad business segments experienced revenue growth year over year in the first quarter of its fiscal year 2024, with its Intelligent Cloud segment emerging as the top performer. Azure, Microsoft’s cloud platform, has consistently gained market share, signaling encouraging growth trends.
Known for its versatility across various segments, Microsoft embodies a well-rounded tech giant that is poised to continue delivering substantial value to shareholders.
CrowdStrike
Cybersecurity firm CrowdStrike (NASDAQ: CRWD) has taken investors on a roller-coaster ride since its IPO in June 2019, experiencing surges and declines. However, a 142% surge in 2023 propelled it near its all-time peak, substantiating its position as a compelling long-term prospect.
CrowdStrike, a trailblazer in AI-native cybersecurity solutions, reported $786 million in revenue in the third quarter of its fiscal 2024, representing a 35% increase year over year. Its annual recurring revenue (ARR) also demonstrated significant growth, reaching $3.1 billion, a figure that reflects ongoing customer retention and sustainable income. With aspirations of achieving $10 billion in ARR within five to seven years, CrowdStrike looks primed for long-term success.
While fluctuations can be expected, CrowdStrike appears to be a winner in the making, particularly in light of the escalating demand and expansion of the cybersecurity industry.
Investment Considerations
As you contemplate investing in these companies, keep in mind that the Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, none of which included Taiwan Semiconductor Manufacturing. Before making investment decisions, thorough consideration is essential for prudent decision-making.
Stock Advisor provides a reputable blueprint for investment success, offering guidance on portfolio construction and delivering two new stock picks every month. With a track record that significantly outperformed the S&P 500 since 2002, the service remains a valuable resource for investors.
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