Let's talk about investing in technology stocks for the long term.
This is a topic that is both relevant and exciting, as the tech sector has been on a roll in the long run, with a severe dip in 2022.
Investing always comes with some level of risk, so it's crucial to do your due diligence before putting your money to work. Despite my best efforts and years of experience, I'm not your financial advisor and I can't know what's best in your specific situation.
That being said, the stocks below are top-quality companies with many years of robust growth ahead. I think you will see impressive returns from buying a few shares today and letting them ride over the years, with some turbulence along the way. The ambitious endgames I see here can be reached only by accepting some execution risk and unprofitable years along the way.
Keep an eye on future developments, in case some unknown but game-changing event disrupts the entire investment thesis. These things happen once in a while, and you should be prepared to reduce or close out your position (hopefully at a large profit, many years from now) when the time comes.
What I can do is give you some ideas for further research or modest buy-ins, setting you up for market-beating success over time. Let's check out some of the top tech stocks that you should consider for the long haul.
Leading the gig economy from the front
The Fiverr (FVRR 0.68%) platform connects businesses and freelancers from all over the world. It's a one-stop shop for all kinds of creative and digital services, from graphic design to writing and everything in between. The company has been snowballing, thanks to the increasing demand for freelancers and the Fiverr platform's ease of use.
The company has seen a ton of success since its founding. Its revenue has increased year over year since its IPO in 2019. Accelerated by the coronavirus lockdowns, and coming down on the backside of that slope, Fiverr's top-line growth rate has slowed down in recent quarters -- but you're still looking at double-digit percentage growth during the inflation-based downturn.
FVRR Revenue (TTM) data by YCharts
That's a good sign for any company, but especially for a tech company like Fiverr that's operating in such a fast-paced and constantly evolving industry.
There are a few reasons why Fiverr appears to be set up for future success. First, the gig economy is only getting bigger, which means more and more businesses and freelancers will be using platforms like Fiverr. Second, the company has been investing in its brand and expanding its services, which should help it stay ahead of the competition. Finally, Fiverr is constantly expanding the range of services it offers on its platform. This diversification helps it stay ahead of the game even during dramatic market shifts.
Language learning as a springboard for greater plans
Duolingo (DUOL -1.53%) is the world's largest language-learning platform. It's a fun, interactive way for people to learn new languages, and it's completely free to use. The company has seen huge success since its founding, and has become one of the most popular language-learning apps around.
This company has been growing rapidly, and its financial performance is downright impressive. Duolingo's revenue has been increasing year over year, and its user base is expanding quickly. In particular, subscriptions to the ad-free and feature-packed premium service are soaring. In November's third-quarter report, total revenues rose 41% year over year while subscription sales surged 68% higher.
This is great news for investors, as it shows that Duolingo is meeting a real demand for language learning and doing it sustainably and profitably.
A few things in the works should keep Duolingo exciting for many years to come:
- The company is expanding its offerings and adding new languages to its platform. Someday, it plans to move beyond languages and apply its learning models to other subjects as well. The complete target market could be enormous as this strategy plays out.
- It's exploring new partnerships with educational institutions and other companies, which could bring even more users to the platform.
- Finally, Duolingo has a talented leadership team, led by MacArthur Fellow Luis Von Ahn, that's constantly looking for new ways to innovate and grow the business, which is always a positive sign.
The service-agnostic streaming powerhouse
Roku (ROKU 0.14%) provides a market-leading streaming platform for TV shows and movies. Its software is available on a wide range of devices, including smart TVs, streaming sticks, and gaming consoles. This has made it one of the most popular streaming solutions in the world, and has given the company a strong position in the fast-growing market for online video.
The stock chart might suggest otherwise, but Roku is experiencing massive growth. The company is going through a difficult market for digital ad sales, as advertisers of all sizes have tightened their marketing budgets in a period of soft consumer spending. Even so, Roku boosted its user base by 16% year over year in Q3, driving 12% higher sales and 21% more hours spent streaming videos on Roku devices.
The company has a large and growing user base that is increasingly turning to its platform for their TV and movie needs. Roku also has a strong ecosystem of partners and content providers, helping it maintain its leadership position in the market. Actually, I would argue that streaming services need to work on Roku's platform more than Roku needs any particular streaming channel. This imbalance gives Roku leverage whenever a content deal is up for renegotiation.
The online video market is expected to continue growing rapidly in the coming years. As a leading provider of service-agnostic streaming tools, Roku should enjoy muscular growth as long as the video-streaming revolution keeps moving forward.
