3 High-Powered Tech Stocks to BUY Without a second Thought

3 High-Powered Tech Stocks to Buy

Market instability can often present the best opportunities to acquire top-tier stocks for long-term investment. This is, of course, easier to see in hindsight! It’s often during the most unsettling times that the best stock selections are made.

However, don’t let short-term market anxieties obstruct your long-term investment strategy. Here are three robust and expanding high-quality tech stocks that you should consider adding to your portfolio today.

1. Applied Materials

Stocks that stand to gain significantly from artificial intelligence have recently experienced a pullback following their extended rally. However, investment in artificial intelligence shows no signs of deceleration. In fact, the challenges seem to be more related to supply limitations rather than a lack of demand.

Applied Materials (NASDAQ: AMAT), with its diverse portfolio of chipmaking equipment, is one of the most attractive and reasonably priced AI investments, trading at less than 18 times earnings.

Applied’s portfolio covers etch and deposition, metrology, and advanced packaging equipment, across both leading-edge and lagging-edge specialty chips, as well as DRAM and NAND memory. This means that regardless of which segment of the semiconductor value chain is performing well or poorly at any given time, Applied should maintain fairly stable results.

This has been evident this year, as despite parts of the chip industry experiencing a significant downturn, Applied’s equipment sales have barely dipped. Additionally, Applied’s services revenue, which accounts for 22.8% of sales and is largely tied to the installed base, provides an extra layer of stability. Services even managed a slight increase last quarter.

AI chips will require increased capital intensity to meet the power-performance demands of new applications. These include new features such as gate-all-around transistors, backside power, and advanced “chiplet” packaging, all of which should benefit Applied’s strengths.

Applied’s high-margin, high return-on-capital business model allows it to invest in future technologies while also rewarding shareholders. Earlier this year, Applied increased its dividend by 23%, with the stated aim of doubling that payout over the next few years. This is all while investing in a futuristic new $4 billion EPIC research and development center for industry and academic collaboration.

A company that invests in the future while also returning cash to shareholders is a formula for long-term gains. That’s why Applied appears to be a strong buy following this summer’s dip.

2. Sea Limited

Sea Limited (NYSE: SE) stock has experienced a challenging year, with the most recent downturn occurring after its August earnings report. However, the stock now appears quite affordable, trading at just 2 times sales. This is quite reasonable for Southeast Asia’s premier e-commerce platform, which also boasts a rapidly growing fintech division and a gaming platform that owns the globally popular Free Fire. Furthermore, Sea has demonstrated its potential for profitability, with cash flow increasing for two consecutive quarters.

Last quarter’s revenue growth was a modest 5%, which led to a significant drop in the stock’s value. However, it’s crucial to examine each segment individually. E-commerce saw a 28% increase, and the higher-margin marketplace e-commerce revenue rose by 38%. Digital financial services grew by 53%.

The issue lay with the digital entertainment games division, which declined by 41.2% as the post-pandemic period set in and the Free Fire user base matured. Despite this, the digital entertainment division experienced an 11% quarter-over-quarter increase in users. Although bookings were slightly down, Free Fire is a free-to-play game, so there’s a good chance that bookings will rebound as users return.

In fact, Sea has been granted permission to reenter the Indian market after Free Fire was banned in February 2022, provided it meets new data security conditions. Sea is working on this and should see user growth when it relaunches Free Fire in India.

Lastly, Indonesia, Southeast Asia’s largest economy, recently imposed restrictions on combining social media with e-commerce. This has halted Tik Tok shop, which had been gaining market share and was considered a potential competitor to Sea. The new regulations should benefit Sea’s core e-commerce platform, Shopee, and alleviate some growth and margin pressures.

As these headwinds begin to subside, Sea’s stock should stabilize and start to recover.

3. Marqeta

Despite the fact that interest rates are considerably higher, which usually restricts the valuations of unprofitable growth stocks, fintech platform Marqeta (NASDAQ: MQ) boasts a substantial amount of cash in its coffers. In fact, Marqeta’s net cash currently stands at $1.4 billion, approximately 50% of its $2.8 billion market capitalization.

Furthermore, Marqeta is undergoing a transformation, with new CEO Simon Khalaf taking the helm earlier this year. Since his appointment, Marqeta has seen a surge in its bookings, with a 150% growth over the past three quarters compared to the previous year. Typically, these bookings take 12-18 months to ramp up and translate into revenue and profits, indicating a strong year ahead for Marqeta. Simultaneously, Khalaf has managed to reduce costs and renegotiate the company’s crucial contract with Block, a major customer, for an additional four years.

Marqeta’s prospects are looking up. Its platform enables companies to customize card programs based on specific and flexible parameters. This allows card issuers more flexibility in tailoring card characteristics, enabling both financial and non-financial companies to issue their own adaptable card programs, some for the first time.

This represents a significant market opportunity, making Marqeta a potentially high-reward investment. And with such a robust cash position, it’s also relatively low-risk.

What are some other fintech companies that I can invest in?

Here are some fintech companies that you might consider for investment:

1. Ant Group: Valued at $78.5 billion, it’s based in Hangzhou, China.
2. Stripe, Inc.: Valued at $50 billion, it’s headquartered in San Francisco and Dublin, Ireland.
3. Revolut: Valued at $33 billion, it’s based in London, U.K.
4. Chime Financial, Inc.: Valued at $25 billion, it’s headquartered in San Francisco.
5. Rapyd: Valued at $15 billion, it’s based in London, U.K.
6. Plaid: Valued at $13.4 billion, it’s headquartered in San Francisco.
7. Brex, Inc.: Valued at $12.3 billion, it’s based in San Francisco.
8. GoodLeap: Valued at $12 billion, it’s headquartered in Roseville, Calif.
9. Bolt: Valued at $11 billion, it’s based in San Francisco.
10. Checkout.com: Valued at $11 billion, it’s headquartered in London, U.K.

Please note that investing in stocks always comes with risks and it’s important to do your own research or consult with a financial advisor before making any investment decisions.

Are tech stocks still a good investment?

Yes, tech stocks are still considered a good investment by many analysts. Here are some reasons:

1. Growth Potential: Tech stocks have long growth runways and solid business models. They are expected to benefit a lot from artificial intelligence¹.
2. Resilience: Despite market turmoil, tech stocks have shown resilience. Even though interest rates are much higher, which tends to limit the valuations for unprofitable growth stocks, some tech companies like Marqeta (NASDAQ: MQ) have a huge amount of cash on their balance sheet.
3. Positive Outlook: Some analysts predict that tech stocks will rise 20% in 2023. Others expect more solid underlying earnings for the sector this year, with sentiment potentially improving in the second half³.
4. Secular Tailwinds: There are secular tailwinds in technology, such as cloud computing and rising semiconductor demand.

However, investing in stocks always comes with risks and it’s important to do your own research or consult with a financial advisor before making any investment decisions.

What are some other sectors that I can invest in?

Here are some sectors that you might consider for investment in 2023:

1. Energy: The energy sector was the top-performing sector in 2022, delivering a total return of 54% year-to-date through mid-December.
2. Information Technology: This sector continues to offer potential opportunities, especially with the long-term shift to an increasingly digitized world.
3. Health Care: The health care sector is another area to watch, with potential growth opportunities.
4. Utilities: Plays on the green-energy transition in utilities present potential opportunities.
5. Real Estate: Opportunities stemming from the tight real estate market could be worth considering.
6. Materials and Industrials: These sectors could offer potential investment opportunities.
7. Communication Services: Despite being the worst performer in 2022, this sector could see a turnaround.
8. Consumer Staples and Consumer Discretionary: These sectors could provide stable returns.
9. Financials: This sector could also offer potential investment opportunities.

Please note that investing in stocks always comes with risks and it’s important to do your own research or consult with a financial advisor before making any investment decisions.

Which of these sectors is most profitable?

As of 2023, the most profitable industries in the United States are:

1. Regional Banking: This industry has the highest profit margin of any American industry as of January 2023, with a profit margin of 30.31%.
2. Financial Services: With a net profit margin of 26.32%, the profitability of non-bank financial services, including insurance services, is not too far off.
3. Commercial Banking: Despite challenges such as increased regulation and the rise of fintech startups offering alternative banking solutions, the commercial banking industry remains a vital part of the US economy.
4. Technology Industry: Many of the world’s largest and most profitable companies, such as Apple Inc., Amazon.com, Inc., and Alphabet Inc., are three of the biggest players in the tech industry.
5. Accounting: This industry is consistently profitable.
6. Oil and Gas Extraction: This industry is also consistently profitable.
7. Legal Services: This industry is consistently profitable.
8. Real Estate: This industry is consistently profitable.

Hottest Stocks of October 2023

Here are some of the top-performing stocks in October 2023:

1. NVIDIA Corp (NVDA): With a performance of 297.54%.
2. Meta Platforms Inc (META): With a performance of 143.69%.
3. Fair, Isaac Corp. (FICO): With a performance of 124.37%.
4. General Electric Co. (GE): With a performance of 120.93%.
5. Royal Caribbean Group (RCL): With a performance of 118.41%.
6. Carnival Corp. (CCL): With a performance of 100.00%.
7. Broadcom Inc (AVGO): With a performance of 96.76%.
8. Adobe Inc (ADBE): With a performance of 91.82%.
9. PulteGroup Inc (PHM): With a performance of 87.86%.

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