Investing in Technology: Solid Picks for Your Portfolio

Investing in technology stocks has proven to be a successful strategy for many investors. This method allows individuals to benefit from major growth trends and capitalize on opportunities that lead to significant returns.

The Nasdaq-100 Technology Sector index soared by 366% over the past decade, easily outpacing the S&P 500, which saw gains of 196% during the same timeframe. However, investing solely in tech stocks can be risky, as downturns in this sector could lead to substantial losses.

Where should you invest $1,000 today? Our analysis team has identified the 10 best stocks worth considering right now. See the 10 stocks »

Amid the technology landscape, two companies stand out for their long-term potential: Nvidia (NASDAQ: NVDA) and Meta Platforms (NASDAQ: META). Proposing to invest in these stocks could prove rewarding as they navigate significant market opportunities. Let’s explore why these companies could be worthwhile additions to your portfolio.

1. Nvidia

Investing in Nvidia has turned out to be a life-changing move for individuals who bought shares a decade ago. A $1,000 investment back then is now valued at about $275,000. This impressive growth highlights Nvidia’s potential for savvy investors knowledgeable about holding onto quality stocks.

Currently, some uncertainties surround Nvidia’s continued market success. Investors are cautious due to concerns about reduced spending on artificial intelligence (AI) chips, increased competition, and possible restrictions on chip exports abroad. Nonetheless, it’s essential to look beyond these short-term issues.

Nvidia has significant opportunities in areas beyond AI. While AI is undoubtedly a key growth driver—especially in data center GPU markets—the shift toward accelerated computing could be a massive revenue opportunity estimated at $1 trillion. Nvidia’s CEO, Jensen Huang, notes that this transition will move forward regardless of AI trends, enhancing data center efficiency and performance.

Moreover, the global AI chip market is expected to grow impressively, with an annual growth rate of nearly 35% until 2035, leading to projected revenues of $847 billion. Given that Nvidia reported $96 billion in revenue in the past year, it indicates a strong growth trajectory for the company going forward.

With an appealing forward earnings ratio of 33, Nvidia might be an attractive long-term investment, particularly given its anticipated earnings growth.

2. Meta Platforms

In the realm of digital advertising, Meta Platforms stands out as a leading player. The digital ad market generated approximately $667 billion in revenue last year and is expected to exceed $1.5 trillion by 2030. Meta offers a prime opportunity for investors to tap into this growing industry.

Projected revenues for Meta are anticipated to reach $163 billion in 2024, marking a 21% increase from the previous year. Based on last year’s digital ad market revenues, Meta would account for over 24% of that market in 2024, suggesting strong potential for continued growth.

Meta’s growth rate is outpacing the overall digital ad market, which grew only 11% last year. Meta’s vast user base, combined with enhanced AI tools for advertisers, positions it well to capture an increasing share of advertising dollars.

With 3.29 billion daily active users on its platforms as of September 2024, Meta leverages its audience effectively through AI-driven advertising strategies, which are yielding higher returns for advertisers. This growing value is reflected in an 11% year-over-year increase in average ad pricing during the third quarter of 2024.

Investors can currently purchase Meta at 29 times earnings, with anticipated bottom-line growth of 52% for 2024 projected at $22.66 per share. Given this robust growth outlook, it’s reasonable to conclude that Meta could provide significant returns to investors in years to come.

A Second Chance at Lucrative Investments

Many investors fear they missed the chance to buy into top-performing stocks, yet there may still be opportunities worth exploring.

Our analysts occasionally issue a “Double Down” stock recommendation for companies that are poised for substantial growth. If you feel you missed your moment to invest, consider making your move before it’s too late. Here are some past examples:

• Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $381,355!*
• Apple: If you invested $1,000 when we doubled down in 2008, you’d have $42,390!*
• Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $514,479!*

Currently, we’re issuing “Double Down” alerts for three outstanding companies, presenting a potential investment opportunity.

Find out more »

*Stock Advisor returns as of January 21, 2025

Randi Zuckerberg, a former marketing director for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.

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