Top Tech Stocks to Consider as the Nasdaq Hits New Heights
Over the past year, many tech stocks have enjoyed significant gains, driven by hopes of lower interest rates and a less challenging economic landscape. However, with the Nasdaq Composite index approaching its all-time highs, it is essential for investors to be more selective about which tech stocks to add to their portfolios.
Instead of simply pursuing the fastest-growing companies, the emphasis should be on those with strong competitive advantages, stable growth trajectories, and reasonable valuations. Notable options include Meta Platforms (NASDAQ: META), Advanced Micro Devices (NASDAQ: AMD), and ServiceNow (NYSE: NOW).
Where should you invest $1,000 today? Our analysts have pinpointed the 10 best stocks to consider right now. Discover the 10 stocks »
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Meta Platforms: Dominating Social Media
Meta is the largest social media firm globally. As of the third quarter of 2024, its main platforms—Facebook, Instagram, Messenger, and WhatsApp—boast a combined 3.29 billion monthly active users, marking a 5% increase from the previous year.
In 2022, Meta’s revenue fell by 1%, affected by Apple’s iOS privacy changes, competition from TikTok, and a shrinking digital ad market. However, 2023 saw a turnaround with a 16% rise in revenue, aided by new tools to address Apple’s updates, the expansion of its Reels feature, and increased ad income from Chinese companies. Analysts predict that in 2024 Meta will see revenue and earnings growth of 21% and 52%, respectively.
Looking ahead to 2025, analysts expect Meta’s revenue and earnings to increase by 15% and 12%, supported by growth in its main apps and rising ad impressions. Despite losses in its Reality Labs segment, which focuses on mixed and virtual reality, Meta’s stock appears reasonably valued at 24 times forward earnings, suggesting further upside potential as market conditions improve.
AMD: A Comeback Kid in the Chip Industry
Advanced Micro Devices (AMD) ranks as the second-biggest maker of x86 CPUs and discrete GPUs. Over the last decade, it has made significant inroads against Intel in CPUs and kept pace with Nvidia in GPUs by offering competitive products at lower prices.
While AMD experienced a 44% revenue increase in 2022 mostly due to its Xilinx acquisition, revenues decreased by 4% in 2023 as it faced challenges related to PC demand. However, for 2024, analysts anticipate a bounce back with projected revenue growth of 13% and adjusted earnings growth of 26% driven by a recovering PC market and new AI-related data center GPUs.
The latest quarter reflected a 122% jump in data center sales, now contributing over half of AMD’s total revenue. This growth is attributed to robust demand for its Epyc CPUs and Instinct GPUs, which are cheaper alternatives to Intel’s Xeon CPUs and Nvidia’s H100 GPUs.
For 2025, growth expectations are even brighter, with analysts projecting 27% revenue growth and 54% adjusted earnings growth, suggesting strong future prospects for a stock currently trading at 25 times forward earnings.
ServiceNow: Leading the Charge in Cloud Solutions
ServiceNow specializes in cloud-based services that help large organizations automate their workflows, enhancing efficiency and reducing costs, particularly amidst the shift to hybrid working environments.
In 2022, ServiceNow’s revenue rose 23%, followed by another 24% increase in 2023. During a period marked by economic uncertainties, the company thrived as businesses sought solutions to improve operations. Key factors included securing government contracts and enhancing its Now Assist platform with generative AI tools.
Analysts forecast that in 2024, ServiceNow will achieve revenue growth of 22% and adjusted earnings growth of 29%. For 2025, revenue and earnings growth of 21% and 19% are expected, reflecting continued demand for automation and AI capabilities. The stock trades at 64 times forward earnings, but its strong growth and integration in the expanding AI sector suggest a potentially lucrative long-term investment.
Seize the Opportunity for Future Gains
Have you ever felt like you missed out on investing in top stocks? There’s a chance to pivot your strategy.
Occasionally, our team recommends a “Double Down” stock—companies poised for substantial growth. If you fear you missed your moment, now might be the perfect time to reinvest. Consider these past performances:
- Nvidia: A $1,000 investment when we doubled down in 2009 would now be worth $387,474!*
- Apple: A $1,000 investment from 2008 would have grown to $46,399!*
- Netflix: Invest $1,000 when we doubled down in 2004, and it would be worth $475,542!*
Currently, we have new “Double Down” alerts for three remarkable companies, and opportunities like this are rare.
Explore 3 “Double Down” stocks »
*Stock Advisor returns as of January 6, 2025
Randi Zuckerberg, a former director of market development at Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is part of The Motley Fool’s board. Leo Sun owns shares in Apple and Meta Platforms. The Motley Fool holds shares in and recommends Advanced Micro Devices, Apple, Intel, Meta Platforms, Nvidia, and ServiceNow. They also advise short options on Intel. Full disclosure policy is available.
The opinions expressed here are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
