Tech stocks have historically been among the biggest gainers in the market—the last two years are evidence of that. This is why some investors have always advocated a buy-and-hold strategy for stocks brimming with potential. We agree that a “star quality” stock might be worth the shot. But with a market brimming with companies of varying quality, how do you choose the best long-term tech stocks? consider factors like a company’s market presence, long-term prospects and healthy balance sheet, and these three companies have these winning qualities.
Adobe (ADBE)
Mostly known for its software Adobe Photoshop and Adobe Acrobat, Adobe (NASDAQ:ADBE) is a software company that offers various products used in multiple industries. One of its most popular software packages, Adobe Photoshop, is synonymous with digital media and design. The software’s capabilities were further enhanced by the company’s acquisition of the Indian startup Rephrase AI. The company recently released its new Adobe Express mobile app in beta, which allows users to access its groundbreaking Adobe Firefly generative AI and experience a better mobile editing experience.
Another reason for Firefly’s intriguing potential is its exclusive use of stock images. This is an attractive feature for businesses using the platform as it guarantees their generated images are safe from copyright infringement.
Looking at its financials, ADBE reported revenues of $19.41 billion, representing a 10% YoY growth alongside impressive operating cash flows of $7.30 billion for the fiscal year. The company is optimistic with its fiscal year 2024 targets; it expects revenue to hit the $21.30 billion to $21.50 billion range and non-GAAP earnings per share to reach $17.60 to $18.00. Its prominence in the software space and the introduction of Firefly give ADBE a compelling argument on why it should be part of your long-term tech stocks.
Tesla (TSLA)
When we talk about electric vehicles, the first company that usually comes to mind is Tesla (NASDAQ:TSLA). It can’t be helped that the company has been at the forefront of mass-produced electric vehicles. Surely, it’s a sign the company is here to stay.
While Tesla may be known for its EVs, it also offers energy generation and storage, including Powerwall and Megapack lithium-ion battery energy storage and solar energy generation. With its successful launch of Cybertruck and positive feedback from buyers, we may have another thing that makes it stand out from its competitors.
While Tesla’s latest financials weren’t as rosy as some previous quarters, there is much more to TSLA than just an EV maker. Investors consider it as a tech company rather than an automaker. Why? Because of its leadership and innovation in the EV space and the tech it builds alongside its products. As such, investors value it as a tech company due to its growth potential.
Despite its lackluster 1% YoY growth in quarterly automotive revenue and 3% revenue increase overall, analysts see prices going as high as $320 in the next 12 months. In addition, opening its Tesla Supercharger network to electric vehicle manufacturers like Ford (and others to come) will generate another revenue stream for TSLA. And these investments are already starting to pay off. Energy generation, storage, services and other revenue segments recorded double-digit growth in Q4 ’23.
With its strong presence, influential CEO and position as a frontrunner in the transition to EV vehicles, TSLA may be worth considering as one of the more attractive long-term tech stocks.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has dominated the gaming market with its GPU lines and enterprise clients with its workstation computers. The company has been enjoying a string of hits, from the crypto boom during the pandemic to the AI boom in the last couple of years. Its expertise in hardware development paved the way for producing more energy-efficient GPUs and processors and meeting the heavy demands of generative AI systems. This has made it a definite leader in the space and will probably stay as such for years to come.
Its 4th quarter earnings alone showed revenue skyrocketing to a 265% YoY growth of $22.1 billion. The company’s main growth driver, the data center segment, has jumped 408% YoY, coming in at $18.40 billion. Its gaming division, which it had mainly been known for, also grew 56.47% YoY from its RTX line. These impressive results and the continued adoption of AI into various industry segments make NVDA a no-brainer for growth and long-term investors looking for high-potential and longer-term tech stocks to add to their portfolios.
On the date of publication, Rick Orford held long positions in ADBE and TSLA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.