Investing in the tech sector is a great way to diversify your portfolio and gain exposure to high-growth industries, but knowing the best tech stocks to buy and hold can be difficult with many options.
Fortunately, this article will give you everything you need to know about buying shares of companies in this sector. So whether you’re looking for stable blue-chip plays or relative newcomers, this list will have something for you. So without further ado, here are three of the best tech stocks to buy and hold.
Tech Stocks to Buy and Hold: Amazon (AMZN)
Amazon (NASDAQ:AMZN) is a tech giant that continues to grow at an astounding rate. It is a leader in e-commerce and cloud computing and is expanding into new areas such as grocery delivery and healthcare.
Amazon is a great stock to buy for several reasons. First, the company has strong financials. It is profitable and has a good record of growing revenue and earnings. Second, Amazon has a strong cash flow. This means it can continue to invest in growth initiatives and fund other projects without worrying about running out of cash. Finally, Amazon has a wide moat. This means it has a durable competitive advantage that will protect its profits from competition.
The recent drop in Amazon’s stock price is mainly because of its ambitious moves during a time when most tech companies are being conservative. Amazon has agreed to purchase One Medical (NASDAQ:ONEM) for $3.9 billion and iRobot (NASDAQ:IRBT) for an all-cash deal valued at $1.7 billion.
In addition, reports indicate Amazon is bidding on Signify Health (NYSE:SGFY), a company based out of Wisconsin. It provides health and wellness information and leverages advanced analytics, cutting-edge tech and nationwide healthcare provider networks.
While Amazon’s growth strategy has been successful, it has also been criticized for being too aggressive. However, Amazon continues to generate billions of dollars in cash flow. And its focus on growth shows no signs of slowing down.
With all this growth, Amazon is one of the most exciting tech stocks to buy today. While there may only seem like short-term volatility, if you’re looking for long-term prospects with a high return on investment, then Amazon should top your list of tech stocks to buy and hold.
Cisco Systems (CSCO)
Cisco Systems (NASDAQ:CSCO) is a leading networking equipment and software provider. The company has been growing rapidly in recent years, due in part to the increasing demand for its products and services. Many of the world’s largest companies use Cisco’s switch and router products. Its software-defined networking solutions are helping to drive the adoption of cloud computing.
Cisco has provided security solutions for both enterprise and consumer customers for a long time. It also provides superior service levels that other companies might be unable to match. The company’s strong product portfolio, impressive track record of innovation and vast ecosystem of partners make it well positioned for continued growth in the years ahead.
Cisco has transformed its business model from a traditional product-based model to a subscription-based model. In three years, Cisco Systems expects 50% of its corporate revenue to come from software and other recurring sales. Cisco’s shift to a subscription-based model has been very successful and helped diversify the company’s revenue streams.
The model provides Cisco with a steadier stream of revenue, which helps the company invest in new product development and future growth. The shift in strategy will help boost margins and ensure its place among the top tech stocks to buy.
Tech Stocks to Buy and Hold: Autodesk (ADSK)
Autodesk (NASDAQ:ADSK) offers a wide range of 3D design, engineering and entertainment products. It offers an array of cloud-based services that allow users to collaborate on projects and share content.
In recent years, Autodesk has made a big push into the world of 3D printing, offering software that makes it easy to design and print three-dimensional objects. With its wide range of products and services, Autodesk is one of the leading 3D design and engineering solutions providers.
In addition, Autodesk’s digital twin technology creates a virtual model of a product or process that you can use to predict and optimize performance throughout its life cycle. By incorporating data from the physical world, digital twins enable organizations to make informed decisions that drive better outcomes. The market for these products is forecast to reach a whopping $48.2 billion by 2026.
The multinational software company reported sales of $1.17 billion and EPS of $1.43 per share in May, which exceeded expectations. The most recent financial report is another example of how Autodesk is not holding anything back. It has a habit of beating analyst estimates, making it one of the best tech stocks.
Autodesk is set to report earnings on Aug. 24. The upcoming report will shed further light on what investors can expect for the rest of the year.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.