The technology market is expanding rapidly. The Nasdaq-100 Technology sector is up 32% over the past twelve months, outperforming the S&P500′A growth of 24% in that period. The rise is reminiscent of the old proverb: “The best time to plant a tree was twenty years ago, but the second best time is now.” The same sentiment applies to the stock market, especially technology stocks.
The technology industry has a reputation for making significant profits over the long term, benefiting from its innovative nature and consistent demand for improved products and software. Meanwhile, recent developments in markets such as artificial intelligence (AI), self-driving cars and virtual/augmented (VR/AR) reality indicate that the technology market is far from reaching its ceiling. As a result, there is no better time than now to invest in technology.
Here are two hyper-growth tech stocks to buy in 2024 and beyond.
1. Nvidia
Shares in Nvidia (NASDAQ: NVDA) have reached record highs in the past year, up 207% and increasing profits. Thanks to its stellar growth, the company has become the first chipmaker to reach a market capitalization of more than $3 trillion, making it the third most valuable company in the world this year, only behind Microsoft And Apple (NASDAQ: AAPL).
Nvidia’s success is due to its dominant position in AI graphics processing units (GPUs), the chips that are crucial for performing AI tasks and running AI platforms. While competitors such as Intel And Advanced micro devices Prioritizing central processing units (CPUs) in recent years, Nvidia’s focus on GPUs gave the company an edge in AI and perfectly positioned it to become the go-to chip supplier for AI developers worldwide.
In its most recent quarter, the first quarter of fiscal 2025, Nvidia’s revenue rose 262% year over year, while operating income rose nearly 700%. The company saw impressive growth in its data center segment, which posted a 427% increase in revenue, illustrating a healthy boost to AI GPU sales.
However, its diverse business model is the best reason to invest in this hyper-growth tech stock. In addition to AI chips, Nvidia has positions in consumer PCs, video games, self-driving cars and more.
In the first quarter of 2025, sales in the company’s automotive segment increased 17% sequentially and 11% year-over-year. Nvidia CFO Colette Kress has expressed enormous potential in the automotive sector as advances in self-driving cars increase demand for chips. During a recent earnings call, Kress said she expects the automotive industry to be the “largest vertical” within the data center segment by 2024.
Nvidia has had an impressive year of growth, but could have a lot more to offer investors as the technology market evolves and the company remains a leading chipmaker. And with a price/earnings growth ratio of less than 1, this hyper-growth technology stock is too good to pass up this year.
2. Apple
Apple shares are up 341% over the past five years, while annual revenue and operating income have risen 47% and 79%, respectively. The company is often praised as one of the best growth stocks to invest in for the long term.
However, Apple has been in a recession over the past twelve months. The company has a reputation for consistently outperforming the S&P 500. While the renowned index is up 24% since last June, Apple’s stock price is up 16%. Investors have grown tired of Apple’s products business after repeated sales declines.
Meanwhile, the rise of AI has highlighted the disparity in Apple’s AI technology compared to some of its rivals. The iPhone giant is not currently a leader in AI. However, recent developments and the Worldwide Developers Conference (WWDC) on June 10 have turned Wall Street bullish again.
Apple shares rose 10% after the conference, where the company debuted new AI services that could boost product sales in the coming months. At WWDC, the tech giant unveiled Apple Intelligence, a new AI platform that will bring generative updates to its product range. iPhone 15 Pro models, Apple Silicon Macs and iPads equipped with M1 through M4 chips give users access to Apple Intelligence, including features like image and language generation, editing tools, an updated Siri and more.
Apple Intelligence could motivate millions of consumers to upgrade to the company’s more recent devices, boosting the product business to overcome recent headwinds.
Shares in Apple are trading at a premium, with a price-to-earnings ratio of 32. However, as the table shows, this figure is below the same benchmark for AI rivals Microsoft and Amazonindicating that Apple’s stock offers better value than either company.
Apple is also significantly outperforming both companies in terms of free cash flow, which could mean the company is better equipped to catch up with its AI competitors and continue investing in its business. In addition to a solid growth history, Apple seems like a screaming buy to me in 2024 and beyond.
Should You Invest $1,000 in Nvidia Now?
Consider the following before buying shares in Nvidia:
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 calls of $45 on Intel, long January 2026 calls of $395 on Microsoft, short August 2024 calls of $35 on Intel, and short calls in January 2026 from $405 on Microsoft. The Motley Fool has a disclosure policy.
2 Hypergrowth Tech Stocks to Buy in 2024 and Beyond was originally published by The Motley Fool
