Technology is one of the most advancing industries at the moment. We can certainly say that it’s one of the dominating sectors in the stock market. Big Tech Savvy’s, including Alphabet, Apple, Facebook, Amazon, and Microsoft, have been dominating the stock market for years now. Therefore, one must have the idea about the best tech stocks to buy now.
Tech stocks continue to hit all-time highs. The Nasdaq 100 has more than doubled from its COVID-19 lows and is up sevenfold over the past decade. Some investors, however, are nervous. After such a big move, the logic goes, surely a correction must be in the cards.
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Tech stocks have been on a tear in 2021, continuing what was a red-hot 2020 for the sector. Even with the 2020’s stock market crash, the tech-heavy Nasdaq surged 43.6% last year. This shows that tech stocks will get you returns and big ones.
The COVID-19 pandemic has driven the tech industry. On that account, we bring you the five best tech stocks to buy now.
The first best tech stock to buy now on our list is Amazon, that goes with the ticker AMZN.
You guys must well know Amazon. The company has grown exceptionally in the last decade. The growth of the e-commerce marketplace has increased Amazon sales. COVID-19 has played the role of a catalyst for Amazon.
According to eMarketer, U.S. e-commerce sales are expected to increase by 17.9% to $933 billion in 2021. There’s no company better positioned than Amazon to take advantage of that growth. Over the last four quarters, Amazon’s North American sales came to $266 billion. That figure has more than doubled over the last three years. This shows how strong Amazon is in this space.
But, it’s beyond that which makes Amazon stock a great tech stock investment for 2021.
Amazon has other profitable divisions that should grow the value of the business. Amazon Web Services (AWS) is the largest cloud service, provider. AWS’s net sales were up by 37% year over year in the second quarter of 2021. AWS generated $4.2 billion of operating profit on $14.8 billion of net sales in the second quarter.
Analysts expect Amazon to nearly double its profits over the next two years. Especially the way Amazon is making its way into the cloud and advertising services. This could really add up to Amazon’s business.
The second tech stock on our list is Facebook with the ticker name FB.
The social media giant has made its way to the very top. Facebook is not just a fun social app anymore. Of course, that’s what it primarily offers to the users, but it has become much bigger.
Facebook is a great platform for content creators, growing as a recruitment platform and e-commerce marketplace. According to Facebook, in the US more than 1 in 3 people on Facebook use its marketplace each month to buy and sell things.
Moreover, Facebook-owned Instagram is also turning into a leading e-commerce platform. The Instagram marketplace has a different interface compared to Facebook. Instagram shopping is a set of features that allows people to easily shop brand’s photos and videos all across Instagram. You can browse products and sell if you have a business of your own.
According to HootSuite, 80% of Instagram users follow at least one business on the platform, and 70% of users are more likely to purchase via mobile.
The momentum Facebook continues to have for its size is remarkable. Facebook along with Instagram and WhatsApp rose 15% year over year in the first quarter of 2021. Totaling up to a staggering level of 3.45 billion users.
Facebook has lost its “cool” factor, Why?
On the other hand, in recent years, Facebook has lost its “cool” factor. Privacy concerns for users and other regulatory issues have really affected the stature of the company. But we believe things work differently as far as the stock market is concerned. Moreover, the pandemic has increased Facebook’s user time.
Where Facebook might have comprised, the company is making new ways to grow. A few we have already mentioned.
The way Facebook generates most of its income is through Ads. Facebook has raised its Ad price by 30%, and 12% more ads are being served combined to send revenue 48% higher. This has caused net income to jump by 94%.
Facebook, which at 22 times forward earnings still seems like a steal, is rapidly coming up on a $1 trillion valuation.
Our third best tech stock is Microsoft, with the ticker symbol MSFT.
Microsoft is the old lady in the tech sector, which has given investors massive returns over the years. Do you guys think the old lady has still enough in the tank to give nice returns?
Let’s have a look. In fiscal 2021, which ended in June, revenue and adjusted earnings per share increased by 18% and 38%, respectively.
The big factor that backs the company is its cloud services. More than 95% of the Fortune 500 companies rely on Microsoft’s cloud services.
Microsoft’s Azure cloud platform comprises more than 200 products. Azure solves problems with easy and convenient solutions. For instance, build, run, and manage applications across multiple clouds, on-premises, and at the edge, with the tools and frameworks of your choice.
Just like Amazon and Facebook, Microsoft’s cloud services are in high demand during the pandemic. A few reasons for this can be the scarcity of competitors in Cloud services and rising online businesses. The company claims to have the most comprehensive compliance coverage of any cloud service provider.
More about MSFT stock – Best Tech Stocks to Buy Now
The revenue from Microsoft’s Azure cloud business grew 51% year over year in the second quarter of 2021. Microsoft is the only cloud provider that supports a wide range of needs for enterprise customers. It is expected over 50 billion devices will come online by 2030. Here, Microsoft’s cloud business would also rise.
Microsoft should also see growing demand for its core software business. Office365 reached a record number of users during fiscal 2020. Since the pandemic, businesses have increased their usage of digital services. From which, Microsoft is benefiting enormously.
With over 1 billion active devices that use Windows 10, Microsoft’s leadership in software translates to strong financials. Over the last four quarters, Microsoft generated $56 billion in free cash flow on top of $168 billion in revenue. And, the company returned $39.9 billion to shareholders through share repurchases and dividends in fiscal 2021.
Zoom Video Communications
Another tech stock that has really been impressive is Zoom Video Communications, with the ticker name ZM.
Zoom has benefited from the increase in online conferences, meetings, and other virtual gatherings. It has been one of the darling stocks in the pandemic. Zoom is in a great long-term position amid the growing digital businesses and virtual meetings.
However, Zoom’s latest results and outlook hint at slowing growth, as people return to the office and students go back to school. Yes, the growth is slowing down. The company recorded a whopping 191% revenue increase in the first quarter of fiscal 2022. While 54% in the second quarter. Whereas, the company has hinted at a lower revenue growth for the remaining two quarters, which is 31% and 15%, respectively.
Do you think Zoom is more than a pandemic stock?
In the second quarter of fiscal 2022, Zoom reported $1 billion in revenues. This is 54% more than last year. This increase was on top of its 355% year-over-year growth in the second quarter of last year. What does this mean?
This means that Zoom made $358 million extra on its top line compared to fiscal 2021. Whereas, the new customers added $265 million to the revenues in the second quarter of 2022. This shows that the company is growing and customers are spending more.
Of course, things will slowdown in between, but Zoom stock looks great in the long-term.
The last stock on the best tech stocks to buy now is Netflix, having the ticker symbol NFLX.
Netflix is the largest streaming network in the world, with over 204 million paying subscribers. According to BooksofApps, Amazon Prime is second on the list with 150 million paying subscribers. These numbers are almost a year old, so the streaming giants would have added more by now.
Netflix made a stunning growth last year adding 36 million subscribers to its network. However, the growth has slowed down this year. The streaming company added just 5.5 million subscribers in the first half of 2021, compared to more than 25 million during the same period a year ago.
This was inevitable as the company reached skies last year. It was obvious to have a lower growth this year. But we’re foreseeing future growth. The streaming industry will continue to grow with or without the pandemic.
These were the five best tech stocks to buy now. Netflix being last on our list, Amazon, Facebook, Microsoft, and Zoom stand tall in the market.