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3 Top Tech Stocks to Buy Right Now

By Chris Neiger – Updated Sep 8, 2020 at 12:26PM

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Don't miss out on what these tech leaders are doing.

Since March, the stock market had been on a tear, fueled mostly by tech stocks that have been growing despite the coronavirus and a U.S. recession. But the market took a hit recently, as investors hit the sell button on many stocks and pushed the S&P 500 down more than 3% in just one day. 

A pullback by investors, though it negatively affects share prices in the short term, isn't all bad news. Some stocks may be cheaper right now because of the sell-off, while others may quickly bounce back to their highs once again. In either case, tech stocks are doing well overall right now because technology is helping companies adapt to new ways of doing business, while simultaneously allowing customers to easily buy goods and services even while some stores remain closed. 

If you're looking for a few tech stocks to add to your portfolio right now, here's why you should consider Fastly (FSLY 0.56%), Netflix (NFLX -2.24%), and Amazon (AMZN -2.72%)

A person pointing to a tablet.

Image source: Getty Images.

Making apps and the web faster than ever

Fastly may not be a household name yet, but that's not stopping this company from making a big splash in the tech space. Fastly is a content delivery network (CDN) and edge computing company that uses its tech to speed up apps and websites. 

The best example of what Fastly does can be found in the company's largest customer, TikTok. The popular social media video app uses Fastly's tech to help deliver high-quality videos to its users.

Fastly has been growing hand over fist recently as more companies look to its services to connect with their customers and users. Fastly's customer count jumped in the second quarter to 1,951 (up from 1,837 in the first quarter) and, as a result of the increase, the company's revenue spiked 62% to $75 million.

Not only is the company gaining additional customers, but they're more lucrative ones as well. Fastly's enterprise customers jumped 16% in the most recent quarter and spend, on average, $716,000 with Fastly -- up from $642,000 in the previous quarter.

Fastly's stock has skyrocketed 307% so far this year, and with the company providing critical technology to a growing list of customers, it's likely that the company still has a lot of room still left to grow.

A long-term bet on video streaming 

While smaller companies like Fastly can bring investors big gains in a short amount of time, there's also something to be said of owning large tech companies that can easily weather economic storms. Netflix is one such company and in the second quarter, the video streaming service proved it can both grow fast and so during uncertain times.

Revenue jumped 25% in the quarter and the company gained 10 million additional customers. Those customer gains, coupled with the company's first quarter net additions, meant that Netflix added 26 million customers in the first two quarters of this year -- up from 12 million in the first six months of 2019.

Not only is Netflix growing its customer base -- it now has 193 million global paid customers -- but many of them are spending more time on the service than ever before. A recent survey showed that 38% of U.S. Netflix customers now spend more than 10 hours each week on the service. That's up from 16% before the COVID-19 pandemic.

Even with other video streaming services benefiting from more people staying at home, Netflix's early lead in the market and its continued growth mean that this tech stock is still a force to be reckoned with. 

A great cloud computing play for years to come

Investors looking for a company that has multiple ways to grow over the coming years need not look any further than Amazon. The company has its hand in everything from smart speakers to grocery stores, but the company's most profitable segment is its cloud computing company, Amazon Web Services (AWS).

AWS sales rose 29% in the second quarter to $10.8 billion and generated $3.4 billion in operating income. To put that last figure in context, consider that Amazon only earned $2.1 billion in operating income from all of its North American retail sales. 

Amazon currently has 33% of the cloud computing infrastructure market, followed by Microsoft with 18%, and this market is nowhere near tapped out. The cloud infrastructure market is expected to reach $167 billion in 2024, up from $73 billion last year, giving Amazon lots of room to expand its current lead.  

Amazon proves that large tech companies can still grow like smaller ones, and add lots of value for investors at the same time. The company's stock is up 83% since the beginning of this year, and with its AWS segment continually growing and the company benefiting from increasing e-commerce sales, Amazon's long-term growth potential is well intact.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Fastly, Microsoft, and Netflix and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$239.71 (-2.24%) $-5.49, Inc. Stock Quote, Inc.
$114.80 (-2.72%) $-3.21
Fastly, Inc. Stock Quote
Fastly, Inc.
$8.98 (0.56%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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