In this article, we will look at the 5 tech stocks to consider for the long term. If you want to explore similar stocks, you can also take a look at Long-Term Stock Portfolio: 11 Tech Stocks to Consider.
5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 87
Wall Street is bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD) and the stock has a consensus Buy rating. This September, Morgan Stanley analyst Joseph Moore adjusted his price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) to $95 from $102 and reiterated a buy-side Overweight rating on the shares. Over the past three months, the stock has received 19 Buy ratings and 7 Hold ratings from Wall Street analysts and has an average price target of $117, which implies an upside of 79% from current levels.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a profitable and cash-rich tech company and one of the best long-term stocks to invest in. The stock has a trailing twelve-month operating margin of 16.8% and has free cash flows of $3.3 billion. The stock is also low-risk and according to the company’s balance sheet, as of June 30, Advanced Micro Devices, Inc. (NASDAQ:AMD) has a debt-to-equity ratio of 0.05.
Insider Monkey found 87 hedge funds that were bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of Q2 2022 and held stakes worth $4.84 billion in the company. As of June 30, Fisher Asset Management is the top shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) and has stakes worth $1.92 billion in the company.
Here is what Baron Funds had to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second-quarter 2022 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers.
AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.
Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
At the close of Q2 2022, 128 hedge funds held stakes in Apple Inc. (NASDAQ:AAPL). The total value of these stakes amounted to $143 billion. As of June 30, Berkshire Hathaway is the top shareholder in Apple Inc. (NASDAQ:AAPL) and has stakes worth $122 billion in the company. The investment covers 40% of Warren Buffett’s 13F portfolio.
As of October 3, Apple Inc. (NASDAQ:AAPL) is trading at a PE multiple of 23x and is offering a forward dividend yield of 0.67%, which the company backs with free cash flows of $107.5 billion. In addition to being cash-rich, Apple Inc. (NASDAQ:AAPL) is also profitable. The company has a trailing twelve-month operating margin of 30.5%. Apple Inc. (NASDAQ:AAPL) is one of the best tech stocks to buy for the long term because the company has strong pricing power, a solid pipeline of products, and a leading position.
Over the past three months, Apple Inc. (NASDAQ:AAPL) has received 23 Buy ratings and 4 Hold ratings from Wall Street analysts and the stock has a consensus Strong Buy rating. Apple Inc. (NASDAQ:AAPL) has an average price target of $182, which represents an upside of 28% from current levels. This September, Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and his $190 price target on Apple Inc. (NASDAQ:AAPL).
Here is what Distillate Capital Partners LLC had to say about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2022 investor letter:
“Apple was largest new purchase in the quarter, at a 2% weight. Apple underperformed the overall market last quarter, and given very minimal debt, this price weakness translated into a commensurate fall in its enterprise value. For stocks with higher debt levels, it takes a disproportionately bigger market cap drop to achieve the same valuation improvement and this is a key reason we avoid highly leveraged names where significant price weakness can be experienced during a revaluation process. Alongside this decline in EV for Apple, its estimated free cash flows have risen steadily throughout the year. This contrast between a falling enterprise value and rising free cash flow, which is highlighted in Figure 12, made the stock sufficiently better valued such that it entered the portfolio. While Apple’s valuation is now attractive enough to warrant inclusion in the portfolio, it still ranks in the bottom quartile of the portfolio’s holdings and so the stock’s initiating weight is capped at a 2%. This contrasts significantly with Apple’s near-7% position in the S&P 500 benchmark, and reflects both our preference to avoid too much concentration risk as well our goal of ensuring that the overall portfolio valuation is as attractive as possible while balancing characteristics of stability and low indebtedness.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) is trading at an attractive valuation currently. As of October 3, the stock has a trailing twelve-month PE ratio of 17.91 and has free cash flows of more than $65 billion. Alphabet Inc. (NASDAQ:GOOG) has also demonstrated to maintain its profit margins and has a trailing twelve-month operating margin of 29.65%. Alphabet Inc. (NASDAQ:GOOG) is among the best tech stocks to consider for the long term.
Alphabet Inc. (NASDAQ:GOOG) is a ‘Strong Buy’ stock on Wall Street. Over the past three months, Alphabet Inc. (NASDAQ:GOOG) has received 10 Buy ratings from Wall Street analysts. On August 3, Tigress Financial analyst Ivan Feinseth reiterated his Strong Buy rating on Alphabet Inc. (NASDAQ:GOOG) and raised his price target on the stock to $186 from $183.
At the end of the second quarter of 2022, 153 hedge funds held stakes in Alphabet Inc. (NASDAQ:GOOG). The total value of these stakes amounted to $22.29 billion. As of June 30, TCI Fund Management owns more than 2.4 million shares of Alphabet Inc. (NASDAQ:GOOG) and is the most prominent investor in the company.
Here is what Lakehouse Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) reported another strong quarterly result despite the tough macroeconomic conditions. Revenue increased by 13% as Search proved resilient, primarily led by strength in the travel and retail verticals. YouTube advertising growth was lighter and moderated due to a tough comparison period and a general softening in brand advertising spend. That said, YouTube’s user engagement and time spent still continues to grow which bodes well for future monetisation opportunities. Google Cloud outpaced the company’s overall growth with revenue increasing by 36% and while it has yet to show any signs of profitability, we remain supportive of Alphabet continuing to reinvest in its cloud business given the size of the market opportunity ahead. On the cost front, the company added another 10,000 employees during the quarter, but notably, the CFO mentioned that hiring will likely slow down over the next twelve months as the company focuses on greater operating efficiency. Overall, we’re pleased with how the company has performed and are confident that management will be able to control costs, if or when the economic environment becomes more challenging.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Insider Monkey found 252 hedge funds that were bullish on Amazon.com, Inc. (NASDAQ:AMZN) at the end of Q2 2022. These funds held stakes worth $30 billion in the company. As of June 30, Fisher Asset Management owns more than 46 million shares of Amazon.com, Inc. (NASDAQ:AMZN) and is the top shareholder in the company.
Amazon.com, Inc. (NASDAQ:AMZN) is a stable and low-debt tech company to own for the long term. According to the company’s balance sheet, as of June 30, Amazon.com, Inc. (NASDAQ:AMZN) has a debt-to-equity ratio of 0.44. The company’s exposure to various end-markets including e-commerce, data center, cloud computing, and artificial intelligence gives it a diverse range of revenue streams and positions it to remain a profitable tech company over the long term.
Wall Street is bullish on Amazon.com, Inc. (NASDAQ:AMZN) and the stock has a consensus Strong Buy rating. Over the past three months, Amazon.com, Inc. (NASDAQ:AMZN) has received 35 Buy ratings and 4 Hold ratings from Wall Street analysts. The stock has an average price target of $172, which represents a potential upside of 50% from current levels. This September, Citi analyst Ronald Josey reiterated his $185 price target and Buy rating on Amazon.com, Inc. (NASDAQ:AMZN).
Here is what Lakehouse Capital had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) proved resilient in the face of ongoing macro pressures and delivered a strong quarterly result along with “better-than-feared” guidance for the third quarter. Net sales increased 7% year-on-year (10% constant currency) to $121.2 billion, while operating profit declined 57% to $3.3 billion. The drop in operating profit was attributable not only to external macro factors, such as elevated shipping and fuel costs, but also lower productivity and efficiency costs as a result of some overcapacity on the back of its recent investment cycle. It was pleasing to see that the company has begun to make progress on the more controllable costs, particularly productivity and staffing, with headcount, for example, down almost 100,000 over the quarter. We continue to believe Amazon is well positioned to manage these short-term issues and remains on track to deliver significant profit improvements over the next twelve months.
Management also confirmed that they have not seen any deterioration in Prime membership growth or retention following the 17% increase in Prime fees put through earlier in the year. This is not surprising to us, as in our view, the price increase was more than justified given the tremendous amount of customer value that has been added since the last price increase was implemented back in 2018, which includes the doubling of its fulfilment network and workforce, significant expansion of free same-day delivery and considerable investments in video and music content. Ultimately, we remain positive about Amazon’s future and believe that the company’s scale and market leadership will continue to drive growth for many years to come.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
As of October 3, Microsoft Corporation (NASDAQ:MSFT) is trading at a PE multiple of 24x and is offering a forward dividend yield of 1.17% which the company backs with free cash flows of $65 billion. Microsoft Corporation (NASDAQ:MSFT) has a rich dividend history and has been awarding investors with dividends for the past 2 decades. On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly cash dividend of $0.68 per share of common stock. The dividend is payable on December 8 to investors of record at the close of business on November 17. Microsoft Corporation (NASDAQ:MSFT) is one of the best long-term tech stocks to buy now.
Microsoft Corporation (NASDAQ:MSFT) is a ‘Strong Buy’ stock on Wall Street. This September, Raymond James analyst Andrew Marok resumed coverage of Microsoft Corporation (NASDAQ:MSFT) with a $300 price target and an Outperform rating. On September 21, Morgan Stanley analyst Keith Weiss reiterated his $354 price target and buy-side Overweight rating on Microsoft Corporation (NASDAQ:MSFT).
At the close of the second quarter of 2022, 258 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) and held stakes worth $56 billion in the company. As of June 30, Fisher Asset Management was the largest shareholder in the company and held stakes worth $7.36 billion.
Here is what Baron Funds had to say about Microsoft Corporation (NASDAQ:MSFT) in its second-quarter 2022 investor letter:
“Shares of Microsoft Corporation, a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues.
As discussed above, we continue to believe Microsoft remains a durable and growing business as companies across all industries look to digitally transform, taking advantage of the continuously expanding solution set Microsoft has to offer.”
You can also take a look at 12 Best AI Stocks To Buy and 8 Best Stocks To Buy Now.
