Technology stocks are having a better time in the market with the Nasdaq-100 Technology Sector index jumping 15% so far this year. Investors seem to be regaining some confidence in this sector amid possible signs of cooling inflation and catalysts such as the growing adoption of generative artificial intelligence (AI) applications.

Since the Nasdaq is known to bounce back strongly after a down year, it won't be surprising to see the index jump higher in 2023 following last year's forgettable performance. That's why investors should consider buying shares of Meta Platforms (META -0.28%) and Micron Technology (MU -2.03%) before they potentially soar higher following their impressive starts to the year.

1. Meta Platforms

Shares of Meta Platforms have shot up over 53% in 2023, with the company's fourth-quarter 2022 results released last month giving the stock a big shot in the arm. The social media giant's better-than-expected numbers and its focus on driving cost efficiencies this year are why investors are upbeat about Meta's prospects.

Wall Street has also turned positive about Meta's fortunes this year. Of the 49 analysts covering the stock, eight have increased their earnings per share (EPS) estimates for 2023. The company is now expected to deliver $9.53 per share in earnings in 2023, which would be an improvement of 11% over 2022. Even better, Meta's EPS growth is expected to accelerate in 2024 to $11.50 per share.

Additionally, the company's top-line growth is expected to improve in 2023 and 2024 following last year's flat performance that saw it deliver $116.6 billion in revenue.

Chart showing Meta's revenue estimates rising slightly or staying level over the next two fiscal years.

META Revenue Estimates for Current Fiscal Year data by YCharts

The acceleration in Meta's top and bottom lines explains why Wall Street analysts forecast, on average, a 12-month price target of $212 with some predicting as much as $275. Meta is well-positioned to deliver such an impressive upside thanks to the uptick in advertisement spending as well as the company's efforts to use artificial intelligence to boost returns on ad spending.

More specifically, digital ad spending is expected to increase 10.5% in 2023 and 11% in 2024, according to eMarketer. Those numbers point toward an improvement over last year's growth of 8.6%. It's also worth noting that use of AI in social media is expected to grow at an annual pace of nearly 29% through 2028.

Meta is already working to take advantage of this opportunity with its AI discovery engine, which focuses on delivering relevant content to users. The company is reaping the benefits of this strategy as the consumption of short-form videos, known as Reels, has more than doubled across Facebook and Instagram in the past year.

Meta says that "advertisers saw over 20% more conversions than in the year before" in Q4 2022 thanks to investments in AI, leading to improvement in ad returns as acquisition costs declined at the same time. This indicates that Meta Platforms could have a much better 2023, and that could rub off positively on the stock, which is attractively valued right now.

Meta is trading at 21.6 times trailing earnings, a discount to the Nasdaq-100's multiple of 24.5. Its forward earnings multiple of 19 suggests an improvement in earnings, which I believe Meta can deliver for all the reasons above. That's why investors who have missed the stock's rally so far should still consider taking a position now.

2. Micron Technology

Micron Technology's 11% gains in 2023 may seem a tad surprising. The memory specialist has witnessed a steep decline in revenue and earnings due to an oversupply in the memory market. The chipmaker's revenue is expected to decline a whopping 46% in the current fiscal year to $16.4 billion, while it's expected to post a loss of $2.00 per share, compared to a profit of $8.35 per share in fiscal 2022.

However, Micron could deliver a better-than-expected performance as memory  chip prices are expected to hit bottom in the current quarter. Prices could recover in the second half of the year, according to dynamic random access memory (DRAM) manufacturer Nanya Technology, driven by inventory restocking by customers.

AI could be another tailwind for the memory industry. Generative AI applications such as chatbots could trigger the need for more memory chips. Data centers will have to be equipped with high-performance memory chips to process huge amounts of data and store it locally to reduce latency and power consumption.

This probably explains why the global memory chip market is expected to grow 7.7% in 2023 to just over $90 billion, according to a third-party estimate. Additionally, the broader AI semiconductor market -- which includes high-bandwidth memory -- is expected to clock terrific annual growth of almost 30% over the next decade, according to Precedence Research.

It won't be surprising to see Micron spring a positive surprise when it releases its fiscal 2023 second-quarter results later this month. It's also worth noting that the company is expected to deliver a sharp turnaround in fiscal 2024, which begins in September of this year. The chipmaker is expected to return to profitability and record robust revenue growth. 

Chart showing Micron Technology's revenue estimates down slightly this fiscal year and next, and up two years from now.

MU Revenue Estimates for Current Fiscal Year data by YCharts

So if Micron's results outperform expectations and management provides a positive memory outlook on the next earnings conference call, this semiconductor stock may sustain its strong start to the year and head higher as 2023 progresses, especially considering a potential turnaround in memory demand.

With Micron trading at 10 times trailing earnings right now, investors can consider buying this Nasdaq stock as it could jump higher if memory market conditions improve.