3 Obvious Tech Stocks to Buy Now

• A massive drop in technology stocks comes after weak jobs data.
• The Nasdaq briefly reached correction territory.
• Falling profits at technology companies left stocks with limited gains.
• Also: Meet the next NVIDIA.

Wall Street continues to churn as U.S. stocks try to regain their footing after a broader market sell-off triggered by worrisome jobs data and weaker quarterly profits from tech giants.

However, investors anticipate that the Federal Reserve’s decision to keep interest rates high for longer will put pressure on the broader economy, as July employment data showed employers added fewer jobs than expected, while unemployment rose to its highest level since 2021.

After reaching correction levels, investors are now more keen than ever to hold on to tech companies that can provide stability amid tumultuous market volatility. Despite the abundance of choice, only a handful of tech stocks are now considered attractive enough for investors to buy and hold for the long term.

Alphabet

Internet giant Google’s parent company, Alphabet (NASDAQ: GOOGL) has seen similar bloodshed in the stock market in recent weeks after its shares fell nearly 7% in a single day following the market sell-off on August 5.

While the stock has since rallied, its current performance is about 17% below its previous peak. Yet Alphabet recently reported its Q2 2024 results, and despite the company reporting a 14% year-over-year improvement in revenue and seeing Search and Cloud revenue hit a new record high and surpass $10 billion in quarterly revenue, the stock’s performance has been somewhat muted by broader market volatility.

That doesn’t mean investors should turn a blind eye, though. Alphabet has been ahead of its competitors by investing heavily in artificial intelligence projects. In addition, the company is working to deliver a more efficient and sustainable cost base, which could help it grow its profits even in a broader market downturn.

Meta-platforms

Facebook’s parent company, Meta Platforms (NASDAQ: META) recently announced that the company is increasing its forward-looking capital expenditures by investing more resources in the development of AI products and services.

The news was not initially well received. For the second quarter of 2024, Meta reported total capital expenditures of $8.47 billion, including capital payments and finance leases, while total cost of expenditures increased 7% from the previous year to approximately $24.22 billion.

However, it wasn’t the rising costs and expenses that caught investors’ attention. Instead, the company generated a solid quarterly revenue of $39.07 billion, which was a 22% increase from the previous year. Additionally, the cost per ad across its family of apps increased 10% from last year.

Meta is not only improving from previous losses suffered at the height of the tech crisis in 2022, but it is also delivering improvements to its results that could allow it to impress investors while offering more competitive digital products and services across its family of apps.

Palo Alto Networks

Palo Alto Networks (NASDAQ: PANW) seeks to capitalize on the rise of artificial intelligence by becoming the premier cybersecurity provider for large-scale organizations and industry-leading development companies.

Additionally, the company is leveraging its current position to leapfrog its closest competitor – Crowdstrike (NASDAQ: CRWD). This follows a recent global technology outage caused by a flawed security update released by Crowdstrike that affected thousands of Microsoft devices worldwide.

Following the technology failures, which left Millions of passengers stranded at airports Worldwide and with healthcare systems offline for several hours, CRWD shares fell nearly 15%. Meanwhile, PANW managed to gain a modest 2.38%, but the company is still trying to make up for an embarrassing 28% loss suffered earlier in February.

The Santa Clara-based company reported a strong third quarter, with revenue up 15% from a year earlier to about $2 billion. GAAP net income of $278.8 million, or $0.79 per diluted share, was an improvement from $107.8 million, or $0.31 per diluted share, in the third quarter of 2023.

With an adjusted free cash flow margin of 38-39%, Palo Alto is focused on achieving strategic growth in areas that could provide the company with long-term upside potential amid the broader hype around AI.

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