From Nasdaq:

Tech stocks, especially in the innovative and ever-expanding market, are known for delivering significant and consistent long-term gains. The Nasdaq-100 Technology Sector has seen a remarkable rise over the last decade, outpacing both the Nasdaq Composite and S&P 500. Wall Street is particularly bullish about tech stocks, especially in areas like artificial intelligence (AI) and cloud computing which have been experiencing significant growth.

Alphabet, the parent company of Google and YouTube, boasts an impressive track record in the tech industry. Revenue for the company has soared 75% since 2019, with a 108% rise in operating income. Its digital advertising business has allowed the company to capture a significant portion of the $740 billion market. Alphabet’s free cash flow exceeded $77 billion last year, while its significant investments in AI and ventures into the chip market position the company for significant long-term growth.

Amazon, after facing a challenging 2022, saw a remarkable turnaround in 2023. The company’s retail business became profitable again, and its cloud platform saw expansion with a focus on AI. By implementing cost-cutting measures and restructuring its business, Amazon saw its free cash flow increase by 427% last year. In Q3 2023, the company posted revenue growth of 13% year over year, outperforming analyst forecasts by $1.5 billion.

Amazon has proven its stability and profitability even in economically challenging conditions, making it one of the most reliable stocks in the tech industry. With highly profitable segments like Amazon Web Services and significant investments in AI, the company is set for long-term growth. Its price-to-sales ratio (P/S) of 2.9 shows that it offers good value for long-term investors, positioning it as an excellent buy.

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