Investing in Technology: Three Top Stocks for Beginners

Starting to invest is a smart move at any age, especially with a history of stocks helping to build wealth. You don’t need a lot of money to begin, and many online brokers offer commission-free trades. Whether you have $100 or $100,000, here are three tech stocks that are excellent options for new investors.

1. Nvidia: Powering the AI Revolution

Nvidia (NASDAQ: NVDA) is a key player in the artificial intelligence (AI) sector. Its graphic processing units (GPUs) are essential for AI infrastructure. Originally designed for enhancing video game graphics, Nvidia’s GPUs are now crucial for fast, powerful computing tasks. They serve as the primary tools for training AI models and running AI applications.

While Advanced Micro Devices competes in this field, Nvidia has established a dominant position with its CUDA software platform. CUDA allows developers to program GPUs for purposes beyond graphics, which made it a vital tool for AI training even before AI gained mainstream attention.

Since the introduction of CUDA, Nvidia has continuously improved the platform with AI-specific tools. Although AMD has a software platform, Nvidia’s is viewed as superior, giving it a remarkable 90% market share in the GPU industry.

Looking ahead, Nvidia is poised for significant growth as companies strive to enhance their AI models. These models increasingly demand GPU resources; current advanced AI models use clusters of 100,000 to 200,000 GPUs, with future models expected to use over a million.

Through successful past performance, Nvidia still presents considerable potential for future gains.

2. Alphabet: More Than Just Google

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is famously known for its Google search engine, but it also dominates the digital advertising market globally. Its advertising technology extends across Google’s platform, YouTube, and other services like Gmail and Maps.

Interestingly, YouTube is the largest streaming platform in the U.S. by viewership, even surpassing Netflix. Yet, its highest viewership comes from the Asia-Pacific region.

Most of YouTube’s revenue comes from advertising, but the platform has expanded its ad-free subscriptions to over 100 million users. Unlike other streaming services, YouTube shares revenue with content creators, making it a valuable asset.

Furthermore, Alphabet ranks as the third-largest and fastest-growing cloud computing company. As AI drives demand for cloud services, Google Cloud’s revenue has soared. The company has also developed custom AI chips with Broadcom for its data centers.

Alphabet is not just about established brands. Its Waymo unit leads in robotaxi services in North America, and Alphabet is making strides in quantum computing, showcasing a mix of established and emerging business ventures.

3. Microsoft: A Leader in Innovation

Microsoft (NASDAQ: MSFT) offers a diverse range of products, from productivity software like Word and Excel under Microsoft 365 to the world’s most popular PC operating system, Windows.

Additionally, Microsoft operates Azure, the second-largest cloud computing service, along with the Xbox console, Activision Blizzard gaming operations, LinkedIn, and GitHub.

The company was an early adopter of AI, investing heavily in and partnering with OpenAI. As demand for its cloud services grows, Microsoft reported that usage of Azure OpenAI has doubled in the past six months, enabling customers to build their own AI applications.

A significant opportunity for Microsoft lies in its AI Copilots for Microsoft 365. New features allow users to utilize Python, a programming language used for data analysis, in Excel through natural language commands. This capability enhances productivity and adds value to 365 subscriptions.

At a cost of $30 per month for enterprise users, this feature should significantly drive growth as Microsoft continues to explore AI opportunities in various sectors, including gaming.

Your Chance to Invest Wisely

Feeling like you missed your opportunity to invest in successful companies? Now could be the perfect time to get in on promising investments.

Our expert analysts occasionally issue a “Double Down” stock recommendation for companies they believe are on the verge of significant growth. Currently, we’re highlighting three companies that may offer high returns:

• Nvidia: Investing $1,000 when we first recommended it in 2009 would have grown to $374,613!*
• Apple: An investment of $1,000 in 2008 would now be worth $46,088!*
• Netflix: $1,000 invested in 2004 would have skyrocketed to $475,143!*

Seize this moment; we’re issuing “Double Down” alerts for three spectacular companies, and opportunities like this are rare.

See 3 “Double Down” stocks »

*Stock Advisor returns as of January 6, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Microsoft, Netflix, and Nvidia. The Motley Fool also recommends Broadcom and has specific options recommendations related to Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily represent those of Nasdaq, Inc.