10 Best Tech Stocks to Buy for 2023 | Investing
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After an uncharacteristically sluggish performance in 2022, tech stocks have come roaring back to life in 2023. In fact, the Technology Select Sector SPDR ETF (ticker: XLK) has more than doubled the S&P 500’s return through Aug. 4 this year.
For more than a decade, brief periods of tech sector underperformance have consistently been long-term buying opportunities, and that trend seems to be playing out once again so far in 2023. However, inflation and interest rates remain headwinds for tech earnings in the near term, making stock selection critical.
Here are 10 of the best tech stocks to buy today, according to CFRA Research analysts:
|Stock||Implied upside over Aug. 4 closing price|
|Apple Inc. (AAPL)||20.9%|
|Microsoft Corp. (MSFT)||24.2%|
|Nvidia Corp. (NVDA)||7.4%|
|Broadcom Inc. (AVGO)||10.6%|
|Adobe Inc. (ADBE)||10.1%|
|Salesforce Inc. (CRM)||19.3%|
|Cisco Systems Inc. (CSCO)||14%|
|Accenture PLC (ACN)||9.3%|
|Advanced Micro Devices Inc. (AMD)||25.2%|
|Intuit Inc. (INTU)||-2.4%|
Apple produces the iPhone, iPad, Apple Watch, Mac computers and other personal computing devices. Its services segment includes its App Store, Apple Music, iCloud and licensing businesses. Analyst Angelo Zino is bullish on Apple’s high customer retention rate, its massive ecosystem of products and services, and its growing global addressable market. Zino says Apple’s stable free cash flow generation, track record of strong execution and aggressive capital allocation strategy warrant a premium valuation to big tech peers. He projects 6.8% revenue growth in fiscal 2024. CFRA has a “buy” rating and $220 price target for AAPL stock, which closed at $181.99 on Aug. 4.
Microsoft is the world’s largest software company and is best known for its Windows, Office and Azure cloud services offerings. Zino says Microsoft’s ongoing cloud transformation and its opportunities in artificial intelligence technology set the stock up well to outperform in coming years. Microsoft’s cloud services include Office 365, Dynamics and Teams, but its cloud revenue also includes LinkedIn, Xbox Live and Bing. Zino says Microsoft has several opportunities to monetize the boom in generative AI, including its large investment in ChatGPT maker OpenAI. CFRA has a “strong buy” rating and $407 price target for MSFT stock, which closed at $327.78 on Aug. 4.
Nvidia designs and sells high-end graphics and video processing chips used for desktop and gaming personal computers, workstations, and other advanced computing servers and supercomputers. Not only is Nvidia one of the best-performing stocks in the entire market in the past 15 years, its year-to-date 205.8% total return is the best performance of any stock on this list so far in 2023. Zino says Nvidia’s Hopper-based graphics processing units are driving impressive momentum in the company’s data center sales, and he projects 59% revenue growth in fiscal 2024. CFRA has a “buy” rating and $480 price target for NVDA stock, which closed at $446.80 on Aug. 4.
Broadcom is a diversified global analog semiconductor supplier. Zino says Broadcom’s networking, switcher and application-specific integrated circuit businesses position the company to be one of the biggest winners from the AI infrastructure boom. He says the extension of Apple’s chip supply deal in May improves Broadcom’s financial visibility given Apple accounts for about 20% of its total sales. Zino says the planned VMware Inc. (VMW) acquisition could help improve margins and diversify Broadcom’s business by adding highly recurring software sales. He projects 7.8% revenue growth in fiscal 2023. CFRA has a “buy” rating and $975 price target for AVGO stock, which closed at $881.65 on Aug. 4.
Adobe produces creative content software and other applications used for marketing and e-commerce. Zino says Adobe has a dominant market positioning in certain content creation apps and significant AI monetization opportunities. He says Adobe’s Firefly generative AI models are attracting significant interest across platforms such as Photoshop and Illustrator, and Firefly creates significant value potential as both a standalone freemium offering for consumers and a distinct offering for enterprise customers. Zino says Adobe management’s track record is impressive, and Document Cloud should continue to be a growth driver. CFRA has a “buy” rating and $580 price target for ADBE stock, which closed at $526.88 on Aug. 4.
Salesforce is the world’s largest provider of cloud-based customer relationship management, or CRM, software. Zino says Salesforce has an attractive valuation and opportunities to improve profitability and increase market share. After years of aggressive acquisitions, he says Salesforce’s CRM portfolio is now by far the most comprehensive offering in the market. Zino projects low-teens growth in both Salesforce’s core sales and service clouds, which together account for nearly half of the company’s total revenue. He targets 9% to 11% overall revenue growth in fiscal 2023. CFRA has a “strong buy” rating and $256 price target for CRM stock, which closed at $214.59 on Aug. 4.
Cisco Systems Inc. (CSCO)
Cisco Systems provides networking, cloud and cybersecurity hardware and software solutions. Cisco shares also pay a 3% forward dividend, the highest of any stock on this list. Analyst Keith Snyder says Cisco is battling near-term headwinds, but the Wi-Fi 6 upgrade cycle and global 5G deployments position Cisco well for the long term. Snyder says component shortages should subside in early fiscal 2023. Meanwhile, Cisco benefits from secular growth in bandwidth consumption, cloud networking and data center usage. He projects 10.3% revenue growth in fiscal 2023. CFRA has a “strong buy” rating and $60 price target for CSCO stock, which closed at $52.63 on Aug. 4.
Accenture is a global information technology services firm that specializes in consulting and outsourcing. Snyder says Accenture’s diverse customer base, solid balance sheet and impressive history of above-average earnings growth make it a high-quality tech stock, even amid a temporary slowdown in industry spending. He says Accenture has strong underlying business momentum and is positioned well to meet growing customer demands in digital, security and cloud services. He projects revenue growth will ramp up from 4.5% in fiscal 2023 to over 7% in fiscal 2024. CFRA has a “strong buy” rating and $341 price target for ACN stock, which closed at $312 on Aug. 4.
Advanced Micro Devices Inc. (AMD)
Shares of microprocessor and graphics semiconductor stock Advanced Micro Devices are up a whopping 3,013% over the past decade, but Zino says there is still more upside ahead. He says the ramp of AMD’s next-generation EPYC processors will help boost AMD’s central processing unit data center server sales. In addition, he is bullish on the outlook for AMD’s GPU offerings, including its Instinct MI250/MI300 GPUs, which will roll out starting in the fourth quarter of 2023. Zino projects margin expansion in the next two quarters. CFRA has a “buy” rating and $145 price target for AMD stock, which closed at $115.82 on Aug. 4.
Intuit produces accounting and management, tax preparation, and personal finance software. Analyst Garrett Nelson says he is bullish on Intuit’s online ecosystem as consumers and small- and medium-size business desktop customers continue to migrate to cloud-based solutions. Nelson says Intuit has a valuable brand, and the acquisitions of Credit Karma and Mailchimp provide valuable data sets and cross-selling opportunities. While Intuit investors must be prepared for volatile earnings numbers tied to seasonal tax trends, Nelson says Intuit can generate above-average earnings growth in a range of macroeconomic conditions. CFRA has a “buy” rating and $485 price target for INTU stock, which closed at $496.98 on Aug. 4.