We're nearly halfway through 2022 and the investing community is already begging for mercy. The benchmark S&P 500 index has fallen about 19% from its peak in January, and the innovation-heavy tech sector has fared much worse. The Nasdaq Composite has plunged by 28% since it peaked in November.
Market corrections are scary in the short run, but long-term investors know stocks that represent successful businesses will eventually bubble back up to the top. So even if you don't have a lot of money to invest at the moment, if you have time, you can make the market work for you. With just $300, you could start adding both of these top tech stocks to your portfolio now.
Nvidia
What do artificial intelligence developers, graphic designers, and computational biologists all have in common? They all rely on Nvidia's (NVDA 4.39%) products to do their jobs. The company first made its mark in the mid-2000s with its graphics processing units (GPUs) -- and the ones it produces now remain the gold standard in the video game industry.
Powerful network effects make Nvidia a great stock to buy now and hold for the long run. Developers of applications that can put a GPU's parallel processing power to work are universally familiar with CUDA, the company's software development kit. Choosing to build an application around GPUs that aren't Nvidia's ensures that a project will struggle to find developers willing to work on it. For Nvidia, this has created a virtuous cycle that has helped it expand its operations into every data-heavy application available.
The graphics segment is still responsible for a majority of Nvidia's business, but revenues from its "compute and networking" segment are rising rapidly thanks to demand for the company's data center platforms and artificial intelligence systems. During its fiscal first quarter, which ended May 1, the compute and networking segment was responsible for 39% of total revenue.
During the fiscal first quarter, data center revenue and gaming revenue both bounced 31% higher year over year, and these aren't the company's only sources of growth. Sales related to the company's professional visualization platform, which generates 3D-work environments for teams to work in virtually, rose 67% year over year. You might expect a company growing this rapidly to trade at a premium multiple, but that isn't the case here. At the moment, you can scoop up shares of Nvidia for just 31 times forward earnings expectations.
Roku
When Netflix began streaming video in 2007, there wasn't an easy way to watch it on your TV set. Roku (ROKU 0.79%) made its mark by selling streaming devices that let you watch Netflix and, more recently, an avalanche of competing services -- on just about any television.
Roku still sells streaming sticks and connected televisions, but that isn't how it makes most of its money anymore. These days, Roku's main business involves selling targeted advertising -- and business is good. During the first three months of 2022, over 60 million Roku accounts streamed 20.9 billion hours of video on Roku's platform, which was 7% more than the previous quarter.
Ad-buying agencies are quickly learning that serving targeted advertisements via connected TV generates better returns for many of their clients than ads on traditional broadcast and cable networks. This trend pushed the average annual revenue per Roku user up 34% year over year to $42.91 as of the end of Q1.
Roku's platform is profitable, but supply chain issues that drove up the costs of manufacturing streaming devices and connected televisions caused the company's bottom line to dip into negative territory during the first quarter. Those supply chain issues will most likely work themselves out and allow it to generate strong profits again in 2023, and many more years to follow.
