Technology stocks have been hit hard in 2022 as rising inflation and fears of recession slow consumer spending. As a result, the Nasdaq-100 Technology Sector index has fallen more than 34% year to date. But these stocks won't stay down forever, which might make now the perfect time to invest for the long term.
Patient investors are in good hands with technology stocks because many of the world's biggest tech companies have seen consistent growth for decades. Here are three tech stocks that could help you retire in comfort.
1. Microsoft
Forty-seven years since its founding, Microsoft (MSFT +0.66%) continues to be a stock that investors can count on. With behemoth products like Windows, Xbox, and Office, the company is a major player in nearly every industry in which it operates.
The company's planned acquisition of Activision Blizzard stands to make it the third-biggest gaming company by revenue behind Tencent and Sony. Meanwhile, Windows has remained the operating system installed on at least three-quarters of the world's PCs and laptops since 2013, claiming 76.3% of the market as of June 2022.
The company's venture into cloud computing has proved particularly lucrative. In the second quarter of 2022, Microsoft's cloud computing service Azure claimed 24% of cloud infrastructure spending, an increase from 22% the previous year, making it the second-most popular service after Amazon Web Services. The success bodes well for the company's earnings; according to Grand View Research, the cloud computing market is expected to grow close to 16% yearly and surpass $1.5 trillion by 2030.
The company's revenue has grown 18% to $198 billion since July 2021, with free cash flow rising 16% to $65 billion. Microsoft is a clear choice for investors in it for the long haul.
NASDAQ: MSFT
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2. Apple
An investment in one of the most innovative technology companies in the world, Apple (AAPL +1.18%), is a surefire way to let your money work for you.
Warren Buffett heartily vouches for it, with the company being his largest holding through Berkshire Hathaway (BRK.A +0.85%)(BRK.B +0.86%). The Buffett-led company ended the second quarter of 2022 with nearly 895 million shares of Apple stock, worth about $122 billion as of June 30 -- 41% of Berkshire's portfolio.
It's not surprising that Buffett would give the company such a vote of confidence. In a tough market for tech stocks year to date, the iPhone manufacturer's shares have fallen 15% versus the Nasdaq Composite's decline of 27% in the same time frame, demonstrating Apple's relative stability. The company has also posted increasing revenue and net income for the past three years despite the pandemic. In 2019, Apple's net sales totaled $260.2 billion; in 2021, it was $365.8 billion. Net income rose 71.3% in the same period, reaching $94.7 billion.
Apple has remained consistent in 2022 with its third-quarter revenue hitting a record $83 billion, a 2% year-over-year rise. The company has projected strong iPhone sales in 2023 and has a variety of promising launches in the second half of 2022, such as the iPhone 14, a redesigned Apple Watch, new iPads, and more.
3. AMD
Advanced Micro Devices (AMD +18.37%) has been in business for more than 53 years and continues to see impressive growth across multiple segments. The semiconductor company's primary sources of revenue are its Client segment, which supplies chips to various PC manufacturers, and its data center business.
In the second quarter of 2022, the Client segment was AMD's largest source of revenue, generating $2.2 billion, a 25% increase year over year. Meanwhile, its overall revenue increased 70% year over year to $6.6 billion. The figures are impressive, considering the PC market has suffered significantly in 2022, with decreased consumer spending causing PC shipments to fall by 15.3% since 2021.
In the company's second-quarter 2022 earnings call, AMD said it had gained client market share for nine consecutive quarters, having stolen share from Intel. AMD ended its second quarter with 20.6% of the desktop PC market and 24.8% of the notebook market, according to Mercury Research. The figures are a considerable rise from 2021's 17.1% for desktops and 20% for notebooks.
In addition to PC market share gains, AMD has seen promising growth in the gaming industry. The company supplies semi-custom chips to Microsoft, Sony, and Valve, which allowed its gaming business to grow by 32% year over year in the second quarter to $1.7 billion. It is likely AMD will retain its relationship with game console manufacturers for years to come, adding to its value.
With AMD's growing market share in the PC market and promising financials, its stock looks set to gain for years to come.
