3 Tech Stocks to Buy Now: May 2024

Stocks to buy

The tech sector has propelled the stock market higher for many years. It’s the largest component of the S&P 500 and the Nasdaq 100. Most Magnificent Seven stocks are tech companies, and this cohort has been carrying the stock market for many years. 

However, some tech stocks are more likely to outperform the stock market than others. Investors can review financials, competitive opportunities and moats to determine if a certain tech stock has a long-term edge. These are three top tech stocks to buy that can lead to positive returns.

Duolingo (DUOL)

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Duolingo (NASDAQ:DUOL) is an educational tech company that helps people learn new languages and other subjects. The app has monthly subscriptions and regularly reports excellent revenue and user growth rates.

The firm didn’t disappoint investors with its Q1 2024 print. Revenue increased by 45% year-over-year, while monthly active users grew by 35% year-over-year to reach 97.6 million users. Daily active users were up by 54% year-over-year and reached 31.4 million.

A high valuation is the stock’s only shortcoming, but the valuation should get smoothed out in a few years. Duolingo is reporting exceptional net income growth and rising profit margins, suggesting a reasonable valuation is on the way. Duolingo reported $27.0 million in net income for the quarter compared to a net loss of $2.6 million in the same period last year.

Duolingo is in the middle of a sharp correction. It’s been a roller coaster for current investors, but the stock looks promising in the long run.

Amazon (AMZN)

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Amazon (NASDAQ:AMZN) has been outperforming the stock market for a while. It’s up 22% year-to-date and has doubled over the past five years. The tech conglomerate is approaching a $2 trillion market cap and trades at a 41-forward P/E ratio

Amazon has a leading position in e-commerce and cloud computing. Those two segments powered up the company’s Q1 2024 results. Revenue increased by 13% year-over-year to reach $143.3 billion. Amazon Web Services reported 17% year-over-year revenue growth, accelerating from the previous quarter. Artificial intelligence is increasing the demand for cloud computing platforms.

The tech firm also has other promising segments like advertising, streaming, groceries, etc. Wall Street analysts fully agree that Amazon is a “Strong Buy.” The average price target suggests the stock can gain an additional 21% from current levels. The highest price target of $246 per share indicates that a 35% upside is possible.

Crowdstrike (CRWD)

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Crowdstrike (NASDAQ:CRWD) has become a top choice in the cybersecurity industry. Businesses need to keep their digital assets safe from hackers. The lack of data breaches can also strengthen the trust between a company and its customers.

The Falcon Platform helps businesses identify and address threats before they get out of control. Hacking is a lucrative industry that can damage any company, especially a small business that doesn’t have as many resources to fight back. 

Analysts believe Crowdstirke can gain an additional 14% from current levels. Accordingly, it is rated as a “Strong Buy.” The stock has been on an incredible run. It’s up 42% year-to-date and has surged by 445% over the past five years. Crowdstrike’s 33% year-over-year revenue growth in Q4 FY24 and significant shift to profitability indicate that the stock can continue to rally. The firm reported GAAP net income of $53.7 million compared to a $47.5 million net loss in the same period last year.

On this date of publication, Marc Guberti held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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