2 Supercharged Tech Stocks You Can Buy with Confidence - Latest Global News

2 Supercharged Tech Stocks You Can Buy with Confidence

While there are no guarantees in the stock market, sticking with growing companies that are leaders in their markets is one of the safest ways to choose stocks for the long term.

service now (NYSE:NOW) and Google Parent alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) are two leading technology companies that are achieving outstanding financial results that are driving their stock prices to new highs. That’s why these stocks are smart buys for 2024 and beyond.

1. ServiceNow

Companies are always looking for ways to improve employee productivity and are increasingly looking to generative artificial intelligence (AI) as the answer in 2024. This is a huge opportunity for the leading digital workflow platform ServiceNow.

The stock has delivered a cumulative return of 1,400% over the past 10 years, driven by 35% compound annual sales growth. The good news for new investors is that the company is still growing its revenue at impressive rates. Last quarter, subscription revenue grew 24% year over year, with generative AI solutions playing a key role in securing top contracts with other companies.

A big advantage for ServiceNow is its partnership with Microsoft to integrate Now Assist AI with Microsoft Copilot. It shows why ServiceNow is the gold standard in the digital workflow market. Most of ServiceNow’s largest deals in the quarter were in generative AI products.

Importantly, subscription-based companies represent solid long-term investments because of their recurring revenue streams and high margins. This explains why analysts expect the company’s earnings per share to grow faster than revenue at an annual rate of 29% in the coming years. That’s enough growth to potentially double your investment in about five years, even if investors pay a lower price-to-earnings ratio for the stock in the future, which is currently 77 times trailing earnings.

2. Alphabet (Google)

AI will have a lasting impact on the economy, and nowhere will this be more evident than in the way people shop and find information online. That’s why investors are increasingly looking at Alphabet as a key beneficiary of this revolutionary technology. Google has been investing in AI for many years and it is starting to pay off.

Sales and profit rose 15% and 61%, respectively, year-over-year in the first quarter. The company delivers these impressive results while investing in its Gemini AI model to deliver smarter search results and other capabilities to the billions of users who rely on Google products.

The company is also seeing strong demand for AI services from enterprise customers on Google Cloud, which is becoming a profitable revenue stream for Alphabet. Google Cloud posted an operating profit of $900 million in its most recent quarter. That’s up from just $191 million in the same quarter last year. The company says its new AI models and algorithms are more than 100 times more efficient than they were 18 months ago.

The stock has risen to new highs this year but still trades at a reasonable valuation. Analysts expect Alphabet to grow its profit by about 19% on an annual basis over the next few years. With a forward P/E ratio of 22, investors can expect the stock to deliver returns commensurate with its future earnings growth. That could mean doubling, if not more, in the next five years, depending on how well Google monetizes AI features in search, YouTube and Google Cloud.

Should you invest $1,000 in ServiceNow now?

Before you buy shares in ServiceNow, consider the following:

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Microsoft, and ServiceNow. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.

“2 Supercharged Tech Stocks to Buy Without Any Hesitation” was originally published by The Motley Fool

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