2 Leading Tech Stocks to Buy in 2024 and Beyond

Tech stocks have been on the move this year, fueling the Nasdaq Composite‘s growth of 13% since January. Investors have grown bullish over the vast potential of artificial intelligence (AI) and its ability to bolster sectors across tech. Industries like cloud computing, chip production, data centers, autonomous vehicles, consumer products, and more have been boosted by AI and will likely continue expanding for years.

The tech industry has a reputation for delivering consistent gains over many years, making it an excellent place to start whether you’re new to the stock market or a seasoned investor looking for new opportunities. Tech companies tend to benefit from reliable demand for upgrades to hardware and software, with the industry hardly ever stagnant from year to year.

In fact, the Nasdaq-100 Technology Sector index has climbed 409% over the last decade despite the COVID-19 pandemic and a market downturn in 2022. Meanwhile, the emergence of AI and other industries suggests tech still has plenty to offer new investors in the coming years.

So, here are two leading tech stocks to buy in 2024 and beyond.

1. Advanced Micro Devices

As a leading chipmaker, Advanced Micro Devices (NASDAQ: AMD) has a powerful position in tech. The company supplies its hardware to companies across the industry, with its chips powering custom-built PCs, laptops, cloud platforms, video game consoles, and more. Many of your own devices likely utilize AMD’s chips, and you might not even know it.

For instance, in 2020, AMD became the exclusive supplier of chips to two of the world’s most popular consoles, Sony‘s PlayStation 5 and Microsoft‘s Xbox Series X|S. These companies have sold nearly 80 million units since their respective consoles launched, illustrating how lucrative the partnerships are for AMD.

However, all eyes have been on the chipmaker’s expanding position in AI over the last year. AMD is challenging Nvidia‘s leading position in the industry with competing graphics processing units (GPUs), the chips necessary for building AI models. AMD launched its line of MI300X AI GPUs last December, and its efforts appear to be paying off.

In the first quarter of 2024, AMD’s revenue rose 2% year over year, beating Wall Street estimates by $20 million. It wasn’t significant growth, but the performance of key segments shows the company is moving in the right direction. During the quarter, a spike in GPU sales led revenue in its data center segment to pop 80% year over year.

Additionally, AMD’s client segment enjoyed an 85% increase in revenue, driven by a rise in central processing unit (CPU) sales.

AMD still has a lot of work ahead as it works to steal market share from Nvidia and expand its AI PC division. However, the company has an exciting long-term outlook. Meanwhile, AMD’s price-to-earnings ratio has fallen 75% over the last six months, suggesting its stock has actually increased in value. Given its potent position in tech, AMD’s stock is worth considering in 2024 and beyond.

2. Amazon

Amazon (NASDAQ: AMZN) is easily one of the most attractive ways to invest in tech, thanks to its diverse business model. The company may be best known for its online retail site, but it has grown into so much more over the years. In addition to holding the leading market share (by a large margin) in e-commerce, Amazon is the biggest name in cloud computing with Amazon Web Services (AWS); has delved into video streaming, grocery, and space satellites; and is now going full force into AI.

In fact, Amazon’s reach is so vast that it dominates markets it never set out to, like being the country’s biggest video game retailer with a 44% market share, ahead of GameStop and Apple‘s App Store/Arcade.

Amazon’s e-commerce segment remains a highly profitable business. In Q1 2024, revenue in its North American and international divisions rose 12% and 10% year over year. Meanwhile, operating income for both retail segments hit a combined $6 billion, considerably improving on the $349 million in losses it reported the year before.

Yet, the best reason to invest in Amazon is AWS. The cloud platform delivered revenue gains of 17% year over year in Q1 2024 while operating income soared 84% to more than $9 billion. AWS gives Amazon a promising role in AI, with the company gradually expanding its library of AI cloud services and investing in new data centers worldwide.

AMZN PS Ratio Chart

AMZN PS Ratio Chart

Moreover, this chart shows Amazon has the lowest price-to-sales ratio among some of its biggest competitors in tech and AI. The figures indicate that Amazon’s stock could be trading at a bargain compared to its rivals, making 2024 an excellent time to buy.

Should you invest $1,000 in Advanced Micro Devices right now?

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

2 Leading Tech Stocks to Buy in 2024 and Beyond was originally published by The Motley Fool

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