In this article, we will look at 10 best tech stocks to buy for the long term. If you want to read about some more winning tech stocks that have upside potential for the long term, go directly to 5 Best Tech Stocks to Buy For The Long Term.
Technology Market Analysis
The global information technology market size was valued at $8.38 trillion in 2021 and is expected to grow to $9.32 trillion in 2022, registering a compound annual growth rate of 11.2%. This growth stems from companies rearranging their operations and recovering from the pandemic, which had earlier led to isolation and remote working, as well as the closure of commercial activities that resulted in operational challenges. The global information technology market is expected to hit $13.81 trillion by 2026, growing at a CAGR of 10.3%. The major trends in the tech industry that are driving its growth include cloud computing, artificial intelligence, extended reality, data analytics, and blockchain among others.
Performance of Some Winning Tech Companies
Technology stocks got off to a rough start in 2022 due to a hike in treasury yields and then surging inflation. However, the tech industry is one of the most lucrative industries and the best tech companies that are adding value to the industry are companies that are working on building the future. While some stocks plummeted, others have appreciated. Some of the most notable gainers of 2021 include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN). These stocks are widely held by elite hedge funds, have positive analyst sentiment, and have appreciated in value significantly over the past year. As of April 5, 2022, Apple Inc. (NASDAQ:AAPL) has gained 36.84% over the past twelve months, and despite supply chain constraints, the company generated annual revenues of $378.35 billion for 2021, up from $294.1 billion in 2020. Microsoft Corporation (NASDAQ:MSFT) reported that for the fiscal year 2021, the tech giant’s revenues amounted to a whopping $168 billion, up 18% year over year, and operating income spiked by 32% to $70 billion. Online ecommerce giant Amazon.com, Inc. (NASDAQ:AMZN) reported that its annual revenue topped $469.8 billion in 2021, up 22% from $386.1 billion in 2020. As of April 5, 2022, Amazon.com, Inc. (NASDAQ:AMZN) has gained 254.81% over the past five years.
To come up with the 10 best tech stocks to buy for the long term, we went through the companies’ financials and associated news regarding future work and present collaborations. We narrowed down our selection to stocks that had positive hedge fund and analyst sentiment. To derive the hedge fund sentiment for each stock, we made use of Insider Monkey’s database which tracks 924 hedge funds as of the fourth quarter of 2021.
Best Tech Stocks to Buy For The Long Term
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 57
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading American technology company that develops, manufactures, and sells networking hardware, software, telecommunications equipment, and other high-end technology services and products. This March, Cisco Systems, Inc. (NASDAQ:CSCO) announced that it will be working with Verizon Communications Inc. (NYSE:VZ) to develop autonomous driving solutions without the use of physical roadside units to extend radio signals. The companies are offering a solution based on cellular and mobile edge compute technologies.
Despite supply-chain constraints and global semiconductor shortages, Cisco System, Inc. (NASDAQ:CSCO) has been outperforming the market. This February, the company released its earnings report for the fiscal second quarter of 2021, in which the company beat EPS by $0.03. The company generated revenues of $12.72 billion, up 6.35% year over year, beating estimates by $63.63 million. Cisco Systems, Inc. (NASDAQ:CSCO) reported earnings per share of $0.84 for the quarter. Moreover, as of April 5, 2022, the stock has gained 5.55% over the past twelve months and on February 17, Cowen analyst Paul Silverstein raised his price target on Cisco Systems, Inc. (NASDAQ:CSCO) to $66 from $61 and reiterated an Outperform rating on the shares.
Investors are bullish on Cisco Systems, Inc. (NASDAQ:CSCO) and hold long positions in the company. By the end of the fourth quarter of 2021, 57 hedge funds held stakes in Cisco Systems, Inc. (NASDAQ:CSCO) worth $3.42 billion. Of these, Ken Fisher’s Fisher Asset Management was the most prominent shareholder in the company. As of April 5, 2022, the fund’s stakes in the company amounted to $809.79 million, which covers 0.45% of Fisher Asset Management’s Q4 2021 investment portfolio.
ClearBridge Investments, an investment management firm, published its third-quarter 2021 investor letter in which it explained what makes Cisco Systems, Inc. (NASDAQ:CSCO) a great long-term investment. Here is what experts at ClearBridge had to say about the company:
“We reinvested a portion of the proceeds into existing holding Cisco Systems, which also has highly valuable technology and an improving secular growth story with its leading position in core networking hardware, as well as in its growing software and services business. Cisco has refocused on winning share in the large and growing hyperscale market and has been investing aggressively in R&D to support growth. We believe Cisco has found new legs after previously ceding some growth opportunities in cloud while maintaining its strong presence in the carrier and enterprise markets. Cisco boasts a strong balance sheet and accelerating multiyear growth while trading at a modest multiple of earnings.”
9. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 72
On March 15, 2022, Intel Corporation (NASDAQ:INTC) announced that it will be investing up to 80 billion euros in the European Union over the next 10 years. The company announced plans to invest 17 billion euros in a semiconductor plant in Germany, create a new research and development design hub in France, and pour investments in research and development along with manufacturing services in Ireland, Italy, Poland, and Spain. Intel Corporation (NASDAQ:INTC) plans to advance and innovate technology in Europe by creating a next-generation European chip ecosystem and at the same time address the need for a more robust supply chain.
Moreover, this April, Intel Corporation (NASDAQ:INTC) announced a strategic collaboration with Lockheed Martin Corporation (NYSE:LMT) to develop cutting-edge 5G-technology solutions which will allow for faster and more decisive actions for the Department of Defense.
Intel Corporation (NASDAQ:INTC) is on a pathway to making Europe the leader in chip manufacturing and increasing Europe’s manufacturing volume by 20% over the next decade, about twice that of today. The company exhibits massive long-term potential and can reward value investors over the years to come.
Intel Corporation (NASDAQ:INTC) is on investors’ and analysts’ radars and is attracting bullish views. This February, Raymond James analyst Chris Caso upgraded Intel Corporation (NASDAQ:INTC) to Market Perform from Underperform. By the end of the fourth quarter of 2021, 72 hedge funds were bullish on Intel Corporation (NASDAQ:INTC), having stakes worth more than $5.50 billion. Of these, Baupost Group was the leading hedge fund, owning more than 18 million shares of the stock which amount to a stake of $928.9 million.
Davis Funds mentioned Intel Corporation (NASDAQ:INTC) in its fourth-quarter 2021 investor letter:
8. salesforce.com, inc. (NYSE:CRM)
Number of Hedge Fund Holders: 110
salesforce.com, inc. (NYSE:CRM) is a leading provider of automated enterprise solutions which bridge the gap between companies and consumers. The company posted strong gains for the fiscal fourth quarter of 2021. This March, the company reported that its earnings for the fiscal fourth quarter of 2021 were valued at $0.84, beating expert estimates by $0.09. The company generated revenues of $7.33 billion, up 25.94% year over year, and outperformed market consensus by $84.15 million. UBS analyst Karl Keirstead raised his price target on salesforce.com, inc. (NYSE:CRM) to $225 from $210 and maintained a Neutral rating on the shares, in light of the company’s Q4 2021 earnings.
According to Insider Monkey’s database, 110 hedge funds held long positions in salesforce.com, inc. (NYSE:CRM) by the end of the fourth quarter of 2021. These funds had collective stakes of more than $11.45 billion in the cloud-computing pioneer. This January, Barclays analyst Raimo Lenschow named salesforce.com, inc. (NYSE:CRM) as his top software pick for 2022.
Fisher Asset Management is the largest stakeholder in saleforce.com, inc. (NYSE:CRM), and the fund upped its Q3 2021 stakes by 5% in the fourth quarter of 2021. As of April 4, 2022, the fund’s stakes in the company are valued at $3.70 billion, which covers 2.07% of Fisher Asset Management’s 13F portfolio.
Some of the best tech stocks to buy for the long term include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and saleforce.com, inc. (NYSE:CRM).
Here is what ClearBridge Investments had to say about salesforce.com, inc. (NYSE:CRM) in its third-quarter 2021 investor letter:
“On an individual stock basis, leading contributors to absolute returns in the third quarter included positions in Salesforce.com. Meanwhile, with a new CFO focused on delivering consistent growth and expanding margins, Salesforce could soon surpass SAP as the world’s largest enterprise applications provider with an all-subscription-based model. The recent acquisition of Slack should better connect the company’s products and services with its users as the messaging platform becomes more dynamic and interactive.”
7. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
NVIDIA Corporation (NASDAQ:NVDA) is a leading American provider of graphic processing units, mobile computing units, and networking solutions. The company is heavily invested in building the metaverse and announced added functionalities for the NVIDIA Omniverse this March. The new features will allow developers to make use of artificial intelligence and NVIDIA’s RTX-enabled tools to develop digital twins of physical operations and structures and run simulations on them.
On March 22, 2022, NVIDIA Corporation (NASDAQ:NVDA) unveiled its Grace CPU Superchip which is designed for high-performance computing to serve large-scale AI applications. The company also presented the NVIDIA OVX, a computing system to support large-scale digital twins, on the same day. The NVIDIA OVX will run within the Omniverse and will allow businesses to evaluate and test complex industrial processes digitally before deploying them in the physical world.
On March 29, 2022, Tigress Financial analyst Ivan Feinseth raised his price target on NVIDIA Corporation (NASDAQ:NVDA) to $410 from $400 and maintained a Buy rating on the shares. The analyst commented on the company’s continuous development in AI and its new products that will drive data centers, gaming, autonomous technology, and the Omniverse, and will pave the path for NVIDIA Corporation (NASDAQ:NVDA) to become “the world’s leading AI processing provider”. As of April 5, 2022, the stock has gained 25.27% over the past six months, and the company boasts a market capitalization of $650.87 billion.
NVIDIA Corporation (NASDAQ:NVDA) was spotted on 110 hedge fund portfolios at the close of the fourth quarter of 2021, which held collective stakes of $10.49 billion in the tech giant. This is a significant increase from 83 positions in the preceding quarter, with stakes worth $10.05 billion in the company. The hedge fund sentiment around NVIDIA Corporation (NASDAQ:NVDA) is positive, and value investors are optimistic about the future outlook of the stock. Fisher Asset Management is the most prominent shareholder in the company and has stakes worth more than $1.5 billion as of April 5, 2022.
During the fourth quarter, the ClearBridge Global Growth Strategy outperformed its MSCI ACWI benchmark. The Strategy delivered gains across eight of the nine sectors in which it was invested (out of 11 total), with the information technology (IT) and industrials sectors the primary contributors. The communication services sector was the sole detractor. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022. Bucking the headwinds among our emerging growth names was Nvidia, which saw continued sales momentum from their leadership positions in the key growth areas of graphics processing units for gaming and data centers.”
6. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 153
Uber Technologies, Inc. (NYSE:UBER) develops and operates technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. It connects consumers with independent providers of ride services for ridesharing services. This March, Uber Technologies, Inc. (NYSE:UBER) announced that it will offer support for Curb, a leading ride-hailing app in the United States. The collaboration will target New York City and will allow New Yorkers to book rides in Curb taxis using the Uber app. Stifel analyst Scott Devitt commented that this strategic collaboration will benefit Uber Technologies, Inc. (NYSE:UBER) by expanding its consumer base in New York City, which is one of its most lucrative markets, according to Devitt. The analyst maintained a $48 price target along with a Buy rating on Uber Technologies, Inc.’s (NYSE:UBER) shares.
On February 9, 2022, Uber Technologies, Inc. (NYSE:UBER) reported that its revenues for the fiscal fourth quarter of 2021 came to $5.78 billion, up 82.56% year over year, beating expert estimates by $420.96 million. The company posted earnings per share of $0.44, beating estimates by $0.77.
Uber Technologies, Inc. (NYSE:UBER) is gaining popularity among elite hedge funds. Our data shows 153 hedge funds were long in Uber Technologies, Inc. (NYSE:UBER) by the end of the fourth quarter of 2021. The combined stakes of these funds amounted to $10.67 billion. Of these, the majority stakes were of Tiger Global Management LLC, making it the most prominent shareholder in the company. The fund’s stakes in Uber Technologies, Inc. (NYSE:UBER) were valued at over $756 million as of April 4, 2022.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), value investors are bullish on Uber Technologies, Inc. (NYSE:UBER).
ClearBridge Investments mentioned Uber Technologies, Inc. (NYSE:UBER) in its third-quarter 2021 investor letter:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber Technologies, Inc. (NYSE:UBER) will also be a key player in the transition from internal combustion engines to EVs.”
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Disclosure: None. 10 Best Tech Stocks to Buy For The Long Term is originally published on Insider Monkey.