Tech stocks have been outperforming over the last decade. Can we expect the trend to continue over the next decade? Well, I don’t know about you. But the strengths demonstrated by the technology industry, be it innovative products or services offerings, are continuously exerting their influence across all aspects of society. In recent weeks, top tech stocks have been outperforming many other sectors in the stock market. Even though tech stocks did experience some pull-back earlier in September, that didn’t last long. Tech companies like Netflix (NFLX Stock Report) and DocuSign (DOCU Stock Report) are just a few examples that have climbed to new highs this year.
We can’t deny the fact that the technology industry has evolved since the dotcom bubble. Tech companies are showing actual profitability and resilience during the pandemic. And that has widened the playing field for tech stock enthusiasts. With so much optimism in the space, it is easy to understand why investors have been looking for top tech stocks to buy for potential breakout gains in the long run.The Dominance Of Tech Is Here To Stay For The Foreseeable Future
The truth is, tech stocks are still growing fast, and showing no signs of stopping. The increasing presence of technology in all aspects of our life means that there’s still plenty of upside. There are always up and coming tech stocks showing up in the market. As technology companies continue to innovate, this in effect creates more room for growth.
Look at some of the biggest tech stocks on Wall Street. Despite their gigantic size, their growth rate continues to be at a healthy level. One prime example would be Apple (AAPL Stock Report), the first tech company to reach the $2 trillion dollar mark. Even with this size, AAPL stock still managed to climb more than 50% year-to-date. Not an easy feat for a company this size. With all that in mind, as the market continues to find new ways for innovative offerings, could these tech stocks fit the mold?
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MercadoLibre (MELI Stock Report) may not be a familiar name among U.S. consumers. But its presence in the stock market is increasingly notable. Since its inception in 1999, the company has grown to serve 18 countries with a marketplace platform that’s sold $16 billion in goods over the past year and processed a staggering $35.5 billion in payments through its Mercado Pago platform. The company is often referred to as the Amazon of Latin America. Not only is the company’s e-commerce segment growing at a rapid pace, but the fintech platform is also set to benefit immensely. This is because many people in Latin America do not even hold bank accounts. With its business riding on two megatrends, the company expects to see significant growth in the long term.
At the onset of the coronavirus pandemic, consumers turned to online shopping. MercadoLibre’s marketplace saw 5 million new and reactivated shoppers in February, March, and April of 2020. In the second quarter ended June 30, 2020, shoppers bought 178.5 million items on the platform. That represents an increase of 69% compared to the first quarter. The amount spent was $5 billion, a jump of 48% from the first quarter.
MercadoLibre may have achieved a $2.8 billion annual revenue run rate, but it is operating in markets in which e-commerce penetration is below that of the U.S. You could say that it’s business has got a long runway ahead. The pandemic has simply accelerated the shift towards e-commerce and contactless payments. Chances are, many new customers will stick around even after the pandemic. With its leadership position in its key markets, is this a tech stock to buy and hold for decades to come?Top Tech Stocks To Watch This Week: IBM
IBM (IBM Stock Report) reported its third quarter revenue that beat analysts’ estimates on 19 October. The gain was in large part due to IBM’s cloud offerings. This is an area that the company will specialize in after spinning off its legacy business units. In an increasingly digitized world, businesses have moved their operations to the cloud. Despite the perception of some, IBM does indeed hope to capitalize on the trend.
“As we look forward, the case for hybrid clouds is clear… It’s a tremendous opportunity valued at $1 trillion with most of the enterprise opportunity ahead of us.”- Arvind Krishna, Chief Executive Officer of IBM
A fresh look at this tech giant could reveal that IBM might be a top cloud stock under the radar in the making. Now, the company hopes to expand its reach in the next-generation of technologies. Apart from focusing on its future cloud offerings, the company has acquired open-source software giant Red Hat for $34 billion last year. This contributed to IBM’s efforts in providing hybrid-cloud software and services offering to rival those from Amazon (AMZN Stock Report) and Microsoft (MSFT Stock Report).
“This is one of the last quarters where IBM’s lagging legacy infrastructure business will drag down performance, as those operations will be spun out to NewCo in 2021, with IBM instead focusing its attention and investment behind cloud and AI, its strongest performing areas,” said Nucleus Research analyst Daniel Elman, in a note before the results were released.Top Tech Stocks To Watch This Week: Nvidia
The inventor of the graphics processing unit (GPU), Nvidia (NVDA Stock Report) has had a stellar performance in the stock market this year. Currently valued at a share price of $539.91, up by a mind-blowing 125% year-to-date. With huge opportunities in areas such as edge computing platforms, healthcare, and of course gaming, the company has a vast opportunity for expansion.
With the company recently announcing its next-generation RTX 30 series, investors were delighted during the unveiling. This next generation of GPUs will have a noticeable performance bump over the RTX 20 series. By making their GPUs more affordable, Nvidia is accessing the larger mid-range market. It is taking on the gaming console divisions of Sony (SNE Stock Report) and Microsoft head-on.
The company expects to report its third-quarter report on November 12. From its most recent quarter available, Nvidia saw record revenue of $3.87 billion, up by 50% from a year earlier. Its data center division reported a revenue increase of 167%, up to $175 billion. Nvidia is on track for potential growth with its solid Q2 results. This is of course before factoring the sales of its RTX 30 series which analysts expect to further increase the revenue of the company.