3 Quality Tech Stocks to Buy on the Dip

Time to Buy the Dip in Quality Tech Companies?

Investors have been dealing with a volatile stretch in the market during the past few weeks, especially in the tech sector. Many of the big winners from earlier in the year are well off of their 52-week highs and continue to face selling pressure on rallies. That means if you’ve been waiting for a good entry point in the top names in tech, now might be the ideal opportunity to take advantage of lower prices. Buying the dip in quality stocks tends to work out over the long run, especially if you are only focused on owning the best businesses.

It’s difficult to envision a market where tech stocks become an afterthought, although we simply can’t predict how long the current weakness in the sector will last. That’s why investors with cash on the sidelines should consider putting some of that capital to work by adding tech companies with strong growth prospects and rock-solid business models. Keep reading on below for an overview of 3 quality tech stocks to buy on the dip.

Amazon (NASDAQ:AMZN)

Amazon has been a major disappointment in 2021, as the stock is only up about 6% year-to-date at the time of this writing. Some investors might be anticipating further weakness for the stock heading into the new year, but betting against the biggest e-commerce retailer in the world is likely not a wise decision. That’s especially true ahead of the holiday season, which should help Amazon deliver a strong Q4. The company delivered its fourth consecutive $100 billion-plus revenue quarter in October and is nicely positioned to continue benefitting from long-term trends like the rise of online shopping and public cloud infrastructure.

Part of what makes Amazon such a unique company is the way it has developed a competitive advantage with its e-commerce marketplace. Most online shoppers will immediately look to Amazon to find their favorite products thanks to the company’s efficient logistics network and cost advantages due to its purchasing power. Amazon Web Services is also an area of the business with a lot of momentum, as the company reported AWS revenue of $16.1 billion, up 39% year-over-year, in Q3. With an average price target of $4202.63 according to MarketBeat’s analyst ratings, the stock could have plenty of price upside ahead if the tech sector can stabilize.

Advanced Micro Devices (NASDAQ:AMD)

Another strong buy the dip candidate to look at in the tech sector is Advanced Micro Devices, as it’s one of the best long-term growth stories around. The global semiconductor company has been a massive winner this year, yet the stock has pulled back substantially from its all-time highs over the last few weeks. Investors that have been waiting for a decent opportunity to add shares might consider the recent weakness a buying opportunity, particularly since the stock tested the 50-day moving average and bounced in a big way.

AMD’s products include x86 microprocessors, accelerated processing units, graphics processing units, and semi-custom System-on-Chip products for PC, gaming, and datacenter end markets. The company has been gaining a lot of market share in the data center space thanks to its innovative EPYC server chips while Intel has been dealing with manufacturing challenges, and those gains are showing up in the company’s earnings reports. AMD saw its third-quarter sales increase by 54% year-over-year to $4.3 billion and could be closing on the acquisition of Xilinx in the coming months, which are additional reasons to consider adding shares.

Meta Platforms (NASDAQ:FB)

The company formally known as Facebook could be another great tech stock to look at heading into 2022, particularly given how far the stock has come in over the last few months. The recent name change and updated business strategy could be just what Meta Platforms stock needs to get going again, and investors need to remember how strong the company’s social media platforms are. In fact, the company’s Instagram application just surpassed 2 billion monthly active users worldwide, a staggering number that has doubled since June 2018.

Going forward, Meta Platforms will operate in two business segments, the family of applications including Instagram, WhatsApp, Facebook, and Messenger, along with reality labs, which will focus on innovative augmented reality and virtual reality hardware and software. The social media giant is likely going to be dealing with a short-term decrease in revenue due to changes in Apple’s advertising platform, but the company is already making progress in dealing with the issue and the recent selloff in the stock is likely an overreaction to management’s comments about the issue last quarter. With the stock reclaiming the 200-day moving average with authority, it’s definitely one to watch in the coming sessions.