Technology stocks continue to outperform most of the other market sectors. And, even though many investors may be hesitant to buy or add to their positions in these stocks at historically lofty valuations, there's still a lot of upside ahead.
If the explosive potential of artificial intelligence (AI) isn't enough to convince you to have at least some exposure to the technology sector, here are a couple of statistics that might.
The Magnificent 7 are the largest technology stocks as measured by market capitalization. Their total market capitalization is about $12 trillion — nearly 23% of the entire U.S. stock market. And it's more than the combined market capitalization of every company in China, France, Canada, Japan, and the United Kingdom.
But you don't have to stick to those seven stocks; there are other options for investors in technology stocks. In this special presentation, we're looking at seven tech stocks that are strong performers now and are likely to continue growing into 2025 and beyond.
Quick Links
- NVIDIA
- Microsoft
- Meta Platforms
- Salesforce
- Netflix
- Palantir Technologies
- SentinelOne
#1 - NVIDIA (NASDAQ:NVDA)
Many investors missed out on the explosive growth of NVIDIA Corp. (NASDAQ: NVDA) stock in the last 18 months. And even with a $3.4 trillion market cap and a forward price-to-earnings ratio of 63x, there’s still a bullish path for growth in this Magnificent 7 stock.
NVIDIA is the clear leader in the high-performance graphic processing units (GPUs) that are needed to power AI applications. Most industry analysts are forecasting the need for hundreds of billions to be spent to keep up with demand. And NVIDIA will get the lion’s share of that demand.
Other companies, notably Advanced Micro Devices Inc. (NASDAQ: AMD), have launched competitive products that may nibble away at certain market segments. But with a commanding market share of over 85%, NVIDIA won’t be unseated any time soon.
As of October 30, 2024, NVDA stock was trading near the consensus price target of around $143. But analysts are beginning to bid the stock higher in advance of the company’s earnings report in mid-November. Most notably, analysts from Bank of America raised their price target for NVIDIA to $190, a 38% increase.
About NVIDIA
NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications.
Read More - Current Price
- $134.70
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 40 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $164.15 (21.9% Upside)
#2 - Microsoft (NASDAQ:MSFT)
Another Magnificent 7 stock on this list is Microsoft Corporation (NASDAQ: MSFT). Technology stocks that have exposure to many different areas may not appeal to some investors, but Microsoft is showing that a jack-of-many-trades can also be a leader.
Microsoft is still the world’s leading software company. And it maintains that title for both consumer operating systems (which includes productivity software) and cloud computing. In 2023, the tech giant announced a partnership with OpenAI to bring generative AI to the forefront of the technology sector. To that end, the company is making savvy investments in nuclear power, which will be needed to meet the insatiable power demand of data centers.
Another compelling reason to buy MSFT stock is that at 33x forward earnings, it’s fairly valued and may be considered undervalued to some other technology stocks. That said, MSFT stock is up just 14% in 2024, which lags the broader market, but analysts give the stock 15% more upside, and the stock pays a dividend that has averaged over 10% growth for the last three years.
About Microsoft
Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.
Read More - Current Price
- $436.60
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 26 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $508.46 (16.5% Upside)
#3 - Meta Platforms (NASDAQ:META)
Meta Platforms Inc. (NASDAQ: META) has been one of the best-performing stocks in the last 12 months, with a stock price gain of over 97%, including 69% in 2024. That’s pushed the stock’s market cap to over $1.5 trillion, making it the sixth-largest technology stock by market cap.
The company’s success is due to its pronounced shift to capture the digital advertising market. In the second quarter of 2024, that generated $38.3 billion in revenue for the company.
Heading into 2025, Meta plans to develop its own search engine powered by its Meta AI chatbot. Plus, with its Quest virtual reality (VR) headset, the company is starting to see some payoff for its investment in the metaverse, which was over $45 billion as of October 2024.
At 27x forward earnings, META stock looks cheap for a technology stock. According to the Meta Platforms analyst forecasts on MarketBeat, the stock is near its consensus price. However, analysts continue to bid the stock higher in advance of its earnings report on October 30.
About Meta Platforms
Meta Platforms, Inc engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately.
Read More - Current Price
- $585.25
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 37 Buy Ratings, 4 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $638.00 (9.0% Upside)
#4 - Salesforce (NYSE:CRM)
Salesforce Inc. (NYSE: CRM) is the leading provider of cloud computing software for customer relationship management (CRM) applications. CRM stock is up approximately 13.5% in 2024 despite a sharp sell-off in May after it missed earnings on the top line. However, the company beat on the top line in its second-quarter earnings report, which puts it on track to generate nearly $41 billion in revenue for its fiscal year.
Similar to NVIDIA, this is a market share story. Salesforce commands approximately one-fourth of the market despite competitors entering it. In 2024, the company launched a suite of AI products, including its Data Cloud and Einstein Copilot, which can unify and protect a company’s data regardless of the large language model (LLM) it uses.
At approximately 39x forward earnings, CRM stock is a little expensive, but if the company delivers strong numbers in its December 2024 earnings report, investors are likely to see analysts continue to bid up the stock price.
About Salesforce
Salesforce, Inc provides Customer Relationship Management (CRM) technology that brings companies and customers together worldwide. The company's service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices; and service that enables companies to deliver trusted and highly personalized customer support at scale.
Read More - Current Price
- $343.65
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 33 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $378.86 (10.2% Upside)
#5 - Netflix (NASDAQ:NFLX)
Neftlix Inc. (NASDAQ: NFLX) stock is up 85% in the last 12 months, but the best may be yet to come for NFLX stock. Heading into 2023, Netflix faced two issues that threatened growth. First, some consumers were dumping the platform due to rising prices and streaming fatigue. Second, the company was looking to crack down on password sharing.
To say the least, Netflix has made a successful transition and broadened its customer base. As part of that transition, the company is now generating significant digital advertising revenue, which can support its production of original content.
In December, Netflix will make its first splash into the National Football League (NFL) market, streaming two games exclusively on Christmas Day. This is likely the first in a series of steps the company will make to capture market share in the live sports market.
At 38x earnings, you’ll pay a premium to own NFLX stock, and some analysts believe that it will be tough for the streaming giant to continue its outsized growth. However, the company has earned the benefit of every doubt.
About Netflix
Netflix, Inc provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices.
Read More - Current Price
- $909.05
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 23 Buy Ratings, 10 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $807.70 (11.1% Downside)
#6 - Palantir Technologies (NASDAQ:PLTR)
There are many stories surrounding Palantir Technologies Inc. (NYSE: PLTR), which can give investors a reason to stay away from a company that may be hard to understand. Retail investors have been fiercely loyal to Palantir, but institutional investors still have their doubts. However, PLTR stock is up 159% in 2024 and over 200% in the last 12 months, which has recently pushed the company’s market capitalization to over $100 billion.
A key driver of growth for Palantir in 2025 is likely to come from the company’s recent inclusion in the S&P 500. There’s some question about how much lift that can give to a stock that’s overvalued by any fundamental metric. The company will have to show 35% sales growth over an extended period to justify its valuation.
But almost every week, you hear about Palantir earning a new contract. And it’s not just government contracts; the company is also adding customers on its commercial side.
About Palantir Technologies
Palantir Technologies, Inc engages in the business of building and deploying software platforms that serve as the central operating systems for its customers. It operates under the Commercial and Government segments. The Commercial segment focuses on customers working in non-government industries. The Government segment is involved in providing services to customers that are the United States government and non-United States government agencies.
Read More - Current Price
- $80.55
- Consensus Rating
- Reduce
- Ratings Breakdown
- 2 Buy Ratings, 11 Hold Ratings, 6 Sell Ratings.
- Consensus Price Target
- $41.00 (49.1% Downside)
#7 - SentinelOne (NYSE:S)
The promise of AI comes with a threat. Specifically, AI is creating threats that didn’t previously exist. As investors have seen multiple times in the last several years, the financial consequences of data breaches are enormous. That will make cybersecurity one of the hottest sectors in 2025 and beyond. And that’s a good reason to look at SentinelOne Inc. (NYSE: S).
The story with SentinelOne is the way its AI platform helps provide cutting-edge protection, including those coming in from AI. The company is adding customers, which is verified by year-over-year revenue growth of 33% in its most recent quarter. More importantly, this was the first quarter in which the company posted a profit.
That's a key reason why S stock is up 17.6% in the last three months. However, the stock is still down about 3% in 2024. That could mean that there’s significant upside that hasn’t been realized.
About SentinelOne
SentinelOne, Inc operates as a cybersecurity provider in the United States and internationally. Its Singularity Platform delivers an artificial intelligence-powered autonomous threat prevention, detection, and response capabilities across an organization's endpoints, cloud workloads, and identify credentials, which enables seamless and autonomous protection against a spectrum of cyber threats.
Read More - Current Price
- $22.43
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 20 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $29.44 (31.3% Upside)
This is only a sampling of technology stocks that may offer strong value through 2025. We are not just in a technology decade but, arguably, in the first quarter of what will be a technology century.
Since 2000, investors have profited from the dawn of the internet, then the emergence of the smartphone and all that entailed. Today, investing in technology stocks means investing in AI, cybersecurity, and the expanding metaverse.
It hasn't always been a smooth ride, but if you invested in a stock like Apple Inc. (NASDAQ: AAPL) or Amazon.com Inc. (NASDAQ: AMZN) in their early days and held onto your shares, you've been handsomely rewarded.
Technology stocks are likely to be an ideal place for investors to put their capital, not just today but for years to come. To help you build a watchlist, MarketBeat provides a list of the 50 largest computer and technology stocks according to market capitalization, which is updated daily. And, if you're a MarketBeat All-Access subscriber, you know that you can keep an unlimited number of watchlists, which may include a list of these or other technology stocks that you favor.
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