3 Tech Stocks That Still Have Room to Run

Stocks to buy

Without question, tech has been the best-performing group so far in 2023. Understandably, that’s got investors looking at the best tech stocks to buy. 

At the same time though, that does create a tough situation. On the one hand, investors want to stick with what’s working. The mentality of “The trend is your friend” has investors looking to stick with this group. 

On the other hand, some investors are fretting about a correction. Just seven stocks have driven almost 90% of the gains in the S&P 500, with all of them being in tech. Not only does that mean many other stocks have lagged and underperformed, but it means a correction in mega-cap tech would almost certainly deal a blow to the S&P 500. 

I’m of the opinion that, even if you may not want to stick with buying tech, it is too soon to buck the trend. There are still tech stocks to buy that have room to run.

Alphabet (GOOGL, GOOG)

Source: Koshiro K / Shutterstock.com

While Microsoft (NASDAQ:MSFT) seems to be getting all the credit in regards to AI, and Apple (NASDAQ:AAPL) gets all the focus for mega-cap tech, many investors seem to be forgetting about Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). 

While Alphabet does lag both of those names in year-to-date performance, it’s still up over 18% so far in 2023.

The worry is that Alphabet is falling behind in the AI race which could weaken its immense grip over the online search market. The reality is that, even if it takes Alphabet some time to catch up in the AI race, its platforms like Google and YouTube should continue to thrive. After all, they are the two most popular websites in the world. 

Analysts expect about 10% earnings growth this year and an acceleration up to 20% growth next year. Plus, shares currently trade at about 20 times earnings while Alphabet totes a robust balance sheet. That should bring buyers, both for growth and value.

Broadcom (AVGO) 

Source: Shutterstock

I have been pounding the table on Broadcom (NASDAQ:AVGO) for a few quarters now and it’s not hard to understand why. The company boasts solid growth, an attractive dividend and a reasonable valuation. 

Of course, several of those qualities have become less attractive as the stock has now rallied in six straight months. Currently AVGO is up more than 50% from the lows, and clearly shares have enjoyed a big rally. However, if the gains continue in the semiconductor space, it’s hard to imagine some of those funds won’t flow into Broadcom stock. 

That’s as consensus expectations call for 7% revenue growth this year and 10% earnings growth. Meanwhile, shares trade at just 15 times earnings and the dividend yield sits near 3%. 

If this stock’s rally ends, then it is one I would certainly look to buy on the dip. 

Palo Alto Networks (PANW)

Source: Shutterstock

It seems like mega-cap tech stocks to buy are getting all the love lately, but few investors seem to be talking about Palo Alto Networks (NASDAQ:PANW) anymore. This name has been on my watchlist as the stock tends to enjoy large upside moves and painful downside corrections.

The rallies are enjoyable when they occur and, for now, the stock is in “rally mode.” Shares have climbed in three straight months, up more than 50% amid that run. Within that stretch, PANW stock climbed in 10 out of 12 weeks, with one of the down weeks showing a loss of just 0.04%. 

While these stats can be dull to read, they underscore my point. Palo Alto Networks stock is up a tremendous amount in a short period of time. Despite it having multiple tailwinds and strong growth in its pipeline, the stock logged its 52-week low in early January 2023. 

If this name continues higher, all-time highs are possible. It would take a gain of just 6.8% from current levels to get there. But use some caution, too. While this is an excellent firm, things can change in a hurry when it comes to stock performance. If the stock seems to be in a correction, look to buy PANW in the dip. 

On the date of publication, Bret Kenwell 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.

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